Page 14 - Arkansas Bound 2020

Federal tax credits and benefits abound
Families paying for college have a number of tax credits and benefits available that can possibly get them cash back each year. The following are some ways to save when paying for education.
American Opportunity Tax Credit
Parents may claim a tax credit for 100 percent of the first $2,000 and 25 percent of the next $2,000 of a dependent child’s college tuition and mandatory fees, for a maximum $2,500 annual tax credit per child. Students may claim the credit only if they are not claimed as a dependent on another person’s tax return. The credit is allowed only for students who are attending a degree program at least half time and who have not completed their first four years of academic study before the beginning of the taxable year. The credit cannot be claimed in more than four tax years for any one stu- dent. www.irs.gov
Deduction for student-loan interest
Up to $2,500 in student-loan interest may be deducted above the line as long as the debt was incurred to pay the college costs for yourself, your spouse or your dependent, while enrolled as a student at least half time in a degree program. A student claimed as a dependent may not take the deduction on his or her own return. www.irs.gov
Lifetime Learning Credit
A taxpayer may claim a tax credit for 20 percent of up to $10,000 in combined
tuition and mandatory fees for himself, his spouse and his dependent children. This equates to a $2,000 tax credit. Claiming the American Opportunity credit described above means that you may not claim a Life- time Learning Credit for any of that student’s expenses in the same tax year. There is no requirement that the student be studying toward a degree or be enrolled at least half time, and there is no limit on the number of years the credit may be taken. For more information, visit www.irs.gov.
Tax-free education assistance
Employers may pay and deduct up to $5,250 in college and graduate-school costs for each employee under a Section 127 ed- ucational assistance plan. The education does not have to be job-related. The ben- efit is tax-free to the employee but cannot be used to pay for an employee’s children or other family members. For more infor- mation on tax incentives for education, see IRS Publication 970, Tax Benefits for Higher Education, available at www.irs.gov.
Tuition and fee deduction
A tax deduction up to $4,000 for tuition and fees from taxable income is available if you or anyone who claims you as a de- pendent submits an American Opportuni- ty, Hope or Lifetime Learning Credit in the same year. Details and additional informa- tion are available at www.irs.gov.
— Courtesy of the Arkansas Department of Higher Education
There are many tax credits available to parents whose children are attending college. Many of these credits can be found on the Internal Revenue Service website.
Arkansas State University
2105 AGGIE ROAD | JONESBORO | ASTATE.EDU | 870-972-2100
Arkansas State, founded in 1909, is the second-largest university in the state. It is located on Crowley’s Ridge in Jonesboro. A Carnegie Research 2 university, A-State hosts the first osteopathic medical school in Arkansas, the New York Institute of Technology’s College of Osteopathic Medi- cine, and opened the first U.S.-style residential campus in Mexico in fall 2017.
Among national universities, A-State was tied for 76th in the country for undergraduate teaching and the best in Arkansas by U.S. News & World Report. Research opportu- nities alongside our faculty are not the exception at A-State. Whether it is performing experiments at the Arkansas Biosci- ences Institute at A-State or assisting with research studies in other laboratory spaces, hands-on work usually associat- ed with graduate school is common for our students.
These undergraduate experiences are highlighted by the annual Create@State spring conference. Create@State participants have an advantage in achieving the graduate school of their choice, including continuing to advanced degrees at A-State.
A-State moved into the U.S. News national rankings for 2020. Along with high marks for undergraduate teaching, A-State topped the state in social mobility. For the second year in a row, A-State is also ranked in the top Southern universities by the Princeton Review.
With a diverse student body from across the nation and
around the world, and more than 90,000 alumni, A-State
is the home of the Red Wolves, a Bowl Championship Se-
ries Division I athletic program with nine consecutive bowl
appearances. disciplines.
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Ranked top in the state for undergraduate teaching and the social mobility of its graduates by U.S. News & World Report, Arkansas State is a leader in a wide range of academic