2009 Stimulus Act Helps Pay For College!
Usually, when one thinks of the 2009 stimulus act, they think of how it bailed out banks and the car industry. What they don’t realize is there was actually something written in it to reward going for advancing one’s education. A piece was added that made it possible to get a tax refund for going to college, and that refund can come to thousands of dollars. Those who are attending on campus schools, as well as taking an online college course or several, can benefit.
This new provision is the American Opportunity Credit, an expansion and renaming of what was previously the Hope Credit. It can even be used in this April’s income tax filing. Determining if and how you fit in under this benefit is imporant for every student. If you are interested in getting more information about distance learning masters research the internet.
According to the IRS, the differences between the Hope and Opportunity credits are several-fold. The Opportunity Credit entitles more students (or their parents) over the next two years to get a tax credit to pay for not only tuition and fees, but also college-related expenses such as required course materials. It also includes many more people with higher incomes and those who owe no tax, which the Hope didn’t.
Originally the limits on this credit were for individuals who made less than $48,000 and married couples who filed joint returns less than $96,000. The credit is now open to $80,000 and $160,000 or less. If one’s income(s) are $90,000 or $180,000 respectively, one can also apply, but they won’t get the maximum amounts. It cuts off when one exceeds those numbers.
What one gets is a 100% refund for the first $2,000 in tuition, fees and/or costs related items. For the next $2,000, one can claim an additional 25%. After the $4,000 mark it goes down to zero. So if the total costs are $6,000; one gets a 100% refund for the first $2000, 25% of the next $2,000 (or $500) and nothing for the last $2,000. That’s a total of a $2,500 the following April. For any additional information about online degree check the internet.
If there’s one thing the IRS is serious about though, it’s to be careful with what one claims as “cost related”. For example, just buying a computer does not make it worthy of a refund. On the other hand, if the school requires a new laptop for its curriculum, it can be claimed.
Another interesting thing that’s different from the Hope is the Opportunity could turn into a refund. This could happen even if the filer is will get a tax refund without the credit. The difference is the cap is a bit tighter. The maximum refund is only $1,000 instead of the full $2,500. For an abundance of information about scholarships and grants check out the web.
There’s one other important detail, and that’s the Opportunity credit is only good for the first two years of college. For juniors and beyond, one has to apply for what is called a Lifetime Learning credit. No matter how a student looks at it though, it’s the kind of stimulus one certainly can use when advancing their education. For more information, check with a tax expert, a financial aid officer or go to the IRS website and look up American Opportunity Credit.
In addition to convenience, those who take an online college course often do so for financial reasons. Exploring this tax credit, which comes after an outlay of funds, as well as online grant, scholarship, and loan options is a good way to maximize and facilitate your learning.
