Kentucky Higher Education Assistance Authority
December Money Tip for Students
Income tax season is fast approaching, and students may want to consider these tips from the Kentucky Higher Education Assistance Authority (KHEAA) to determine if they are required to or should file.
Although you may not have earned enough to be required to file, you may get a refund if your employer withheld taxes from your pay. But before you file, discuss the tax situation with your parents. Depending on how much they contributed to your upkeep during the year, they may be able to claim you as a deduction on their tax returns, which could save them thousands of dollars.
Although the deadline for filing your federal and state returns is April 15, you should start working on them as soon as you get your last paycheck for the year. That will show how much you have earned and how much has been withheld in taxes.
Students and their parents may be able to take advantage of deductions or income adjustments on their federal taxes. These include the:
· American Opportunity Credit, available for the first four years of college.
· Hope Credit, available for the first two years of college.
· Lifetime Learning Credit, available if a taxpayer or a dependent is taking college courses to acquire or improve job skills.
· Tuition and fees deduction, which lets taxpayers deduct qualified education expenses paid during the year for themselves or a dependent. The expenses must be for college.
· Student loan interest deduction, which lets people deduct up to $2,500 per year on federal taxes for interest paid on federal student loans.
To learn how to plan and prepare for higher education, go to www.gotocollege.ky.gov. For more information about Kentucky scholarships and grants, visit www.kheaa.com; write KHEAA, P.O. Box 798, Frankfort, KY 40602-0798; or call (800) 928-8926, ext. 6-7372.