Monday, July 13, 2009
New Tax Credit Eases College Tuition Burden
If you want help financing college education, it could be as easy as filing your taxes.
The American Recovery and Reinvestment Act allows for a tax credit--a reduction in your tax bill--of up to $2,500 per student for the cost of tuition, fees and book expenses paid in 2009 and 2010. This amount is an increase over previous Hope and Lifetime Learning Credit limits and applies to tax years 2009 and 2010, so the earliest you'll get the credit is early 2010 for the 2009 tax year (MSN Money June 24).
You don't have to fill out any extra financial-aid applications to get the money--just file your tax return, whether you owe taxes or not. To find out if you're eligible and learn what's covered, visit irs.gov.
To get the tax credit, complete IRS Form 8863 next year when you file your 2009 return. In the meantime, make sure you keep good records for tuition, fees and book expenses throughout the year.