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View Full Version : Going to Trade School/College for CHEAP




Jordan
12-18-2010, 11:51 AM
I posted about this in another section of the forum. However, I think its very important, and something a lot of people here would be wise to consider.



Going to college for cheap 2010, 2011, 2012
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As part of the 2009 economic stimulus package came the American Opportunity Tax Credit. This tax credit provides up to $2,500 for college or trade school expenses per year for the 2010, 2011, and 2012 tax years. Basically, all college expenses up to $2000 are covered 100%. College expenses from $2,000-4,000 are covered 25%. $1,000 of the tax credit is refundable, meaning you don't have to have any income or taxes paid to get that much. $1,500 of it goes against your current tax burden. Qualifying expenses= tuition, fees, books.

*Note: If you're claimed as a dependent, your parents will have to claim this tax credit for you. If you claim it on your own as a dependent, you will not be eligible for the refundable portion. Instead, it reduces your tax due as a nonrefundable credit.

The American Opportunity Tax Credit for single people who make less than $80,000 a year or married couples who earn less than $160,000. Earn too much? There are other deductions and tax credits that I am not intimately familiar with.

This works for trade schools as well. Basic test: if the school you're going to accepts Federal Pell Grants/Loans then it qualifies. You have to be seeking a certification of some kind in order to get the credit. This could be a 1 year certification in woodworking, or office skills, for example. Or it could be an associates in nursing, or a bachelors in talk radio. As long as you're seeking a certificate, and not just showing up to hit on chicks half your age, you qualify!

You must go half time to qualify. This credit can be claimed a maximum of four tax years, and is only for people who have not yet completed a full 4 years of college.

TIME IS OF THE ESSENCE
If you decide to seek a post-secondary education starting next spring, you can pay for it before 2010 ends and get your money back when you file your 2010 returns here in a couple months, even though the semester/quarter isn't until 2011. Otherwise, the 2011 and 2012 tax years are still fair game.

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I am not an accountant. However, I am very familiar with this tax credit and am willing to answer any questions. This is not legal or tax advice. Seek an accountant.

I am not at all interested in a debate about postsecondary eduction, professor bias, the intelligence gap between graduates of different levels of education, nor the constitutionality of tax credits, student loans, Pell grants, Dept of Education.

I am, however, interested in providing any information about how this tax credit works, or how to best claim this tax credit. If you have specific questions you'd like me to answer, please post below, and I'll do my best. If you have a question you don't want in public, my PM box is always open.