by Tim Ballard
Income tax return season is approaching, and students may want to consider these tips from the Kentucky Higher Education Assistance Authority (KHEAA) to help run the tax preparation process more smoothly.
“The Kentucky economy has experienced historic growth over the past two years,” the Kentucky governor said. “In order to continue this growth, we need to help more Kentuckians access higher education, and it can make the tax credits and deductions available to all.”
Before students file their tax return, they should discuss the situation with their parents who may be able to claim them as dependents, which could save them thousands of dollars.
Additionally, students and parents may be able to take advantage of these programs on their federal taxes:
·American Opportunity CreditAvailable for the first four years of college.
·Lifelong Learning CreditAvailable if the taxpayer or a dependent is taking college courses to gain or improve job skills.
·Tuition and Fee Discounts, which allows taxpayers to deduct expenses for qualifying education paid during the year for themselves or a dependent. These expenses must be for college.
·Student loan interest deduction, allowing people to deduct up to $2,500 annually in federal taxes for interest paid on federal student loans.
For more detailed information about federal programs, go to irs.gov to download the free version of Publication 970 Tax Benefits for Education.
Kentucky also offers a tuition tax credit for undergraduate students who attend state colleges.
Tax rules may change from year to year, so make sure you have the most current information before you file your return. If you have questions about what financial aid is taxable, you should consult a tax professional.
KHEAA is the agency that administers the state’s scholarship and grant programs, including the Kentucky Educational Excellence Scholarship (KEES). The agency also provides free copies of “It’s Money, Baby,” a guide to financial literacy, to schools and Kentucky residents upon request at email@example.com.
Many KHEAA student assistance programs are funded by Kentucky Lottery receipts.
For more information about grants and scholarships in Kentucky, visit kheaa.com or write to KHEAA (PO Box 798, Frankfort, KY 40602) or call 800-928-8926, ext. 6-7214.