NASFAA’s 2016 Higher Education Tax Benefit Guide Can Help During Tax Season
Parents and Students: Don’t Miss Out on the Final Year to Take Advantage of the Tuition and Fees Deduction
If you have a child in college make sure you are getting the maximum tax deductions that you can get. NASFAA sent this to me and I wanted to share this with you.
Tax day is fast approaching, but with three extra days to submit, parents and students can breathe easy! Because April 15 falls on a Saturday, this year taxes aren’t due until April 18, 2017, giving families even more time to explore higher education tax benefits that could shave thousands off their 2016 tax bills.
Newly updated resources from the National Association of Student Financial Aid Administrators (NASFAA) can help. The “2016 Tax Year – Federal Tax Benefits for Higher Education” page in the Student, Parents & Counselors section of NASFAA.org explains the tax credits and deductions available for the 2016 tax year. The information can help taxpayers determine if they are eligible for current incentives, including:
- The American Opportunity Tax Credit: This credit provides up to $2,500 per student and up to 40 percent of the credit may be refundable
- The Lifetime Learning Tax Credit: This credit provides up to $2,000 per tax return and is non-refundable.
- Tuition and Fees Tax Deduction: This deduction, originally established as just a temporary tax benefit, can reduce taxable income by as much as $4,000. Because this deduction was not renewed by Congress before the end of 2016, the 2016 tax year is the final year in which taxpayers may take advantage of it.
- Student Loan Interest Deduction: This deduction allows a taxpayer to deduct interest paid on student loans of the taxpayer, a spouse, or dependents, and can reduce taxable income up to $2,500.
“Education tax credits that could save families thousands go unclaimed each year,” NASFAA President Justin Draeger said. “As the students and families are tasked with shouldering a larger portion of college costs each year, we encourage parents and students to take every opportunity to educate themselves about tax options that can help defray the costs of tuition, fees, supplies, and even student loan repayment.”