College Tuition tax break expires Dec. 31

[musicohana]

<p>Just an FYI, I was trying to figure out if there would be an advantage to paying spring tuition by tomorrow, and apparently there is according to this CNN article: </p>

<p>8</a> disappearing tax breaks - Dec. 27, 2013</p>

<p>"1. Tuition and fees: A deduction for tuition and fees of up to $4,000 is currently available to parents and students paying for college. More than 2 million taxpayers claimed this break in 2010, saving more than $4 billion, according to the most recent data available from H&R Block. </p>

<p>If you want to take advantage of this tax break before it expires, you'll need to pay your spring 2014 tuition and fees before Dec. 31, said Lindsey Buchholz, lead research analyst at the Tax Institute of H&R Block. That way you can still claim those costs on your 2013 tax return."</p>

<p>Heading to the bank to deposit enough to pay online...</p>

[rockvillemom]

<p>I saw that also and find it misleading/incorrect. The best tuition tax break is the $2500 American Opportunity Tax Credit - and that has several years to go. A tax credit trumps a tax deduction.</p>

<p>

American Opportunity Tax Credit</p>

<p>Update May 31, 2013 — This page has been updated to reflect the fact that the American Opportunity Tax Credit, which was to expire at the end of 2012, was extended through December 2017 by the American Taxpayer Relief Act of 2012.</p>

<p>Update November 9, 2011 — This page has been updated to reflect the fact that the American Opportunity Tax Credit, which was to expire at the end of 2010, was extended for an additional two years through December 2012 by the Tax Relief and Job Creation Act of 2010.</p>

<p>Under the American Recovery and Reinvestment Act (ARRA), more parents and students will qualify for the American Opportunity Tax Credit to help pay for college expenses.</p>

<p>The American Opportunity Tax Credit modifies the existing Hope Credit. The AOTC makes the Hope Credit available to a broader range of taxpayers, including many with higher incomes and those who owe no tax. It also adds required course materials to the list of qualifying expenses and allows the credit to be claimed for four post-secondary education years instead of two. Many of those eligible will qualify for the maximum annual credit of $2,500 per student.</p>

<p>The full credit is available to individuals whose modified adjusted gross income is $80,000 or less, or $160,000 or less for married couples filing a joint return. The credit is phased out for taxpayers with incomes above these levels. These income limits are higher than under the existing Hope and Lifetime Learning Credits.

</p>

[rockvillemom]

<p>Just to add further clarification - the $4000 tuition deduction is set to expire. But most families would be better off with the $2500 American Opportunity Tax Credit anyway.</p>

[JichaelMackson]

<p>That’s really interesting. Thanks rockvillemom!</p>

[musicohana]

<p>Whew, thanks for clarifying. Not only did I post this in a different forum than I’d intended, I had the significance wrong. Still, that article did light a fire under me to get it done.</p>