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$2,500 Education Tax Credit
- Thread starter Aimster
- Start date
DarrelSPowers
Senior member
jpeyton climbing out of P&N.
It has been brought to you by Obama.
Depends on how it is written.
It may be that you get to take off $2,500 from your income. So if you pay 30% taxes, that's $2,500 you don't have to pay 30% on. That equates to $750 in your pocket.
If it's an actual credit, then that $2,500 goes towards your tax liability. So if you were to pay $4,000 in taxes for the year, you would only have to pay $1,500 (4,000-2,500).
SuperjetMatt
Senior member
There are already 3 education tax credits out there, at least two of which make job-related education (or education leading to a degree) tax-deductible.
So I doubt this new thing would be a mere tax deduction.
So I doubt this new thing would be a mere tax deduction.
mugs
Lifer
:laugh:
The funny thing is, jpeyton is too busy <deleted> to read about what he's talking about. His answer to the OP is wrong. You have to spend $4k to get the full credit.
In response to the other misconceptions that are being discussed in this thread-
1. It is a credit not a deduction.
2. It is partially refundable (that is, you can get money back even if you have a total tax liability of $0 or less).
The term "refundable tax credit" is kind of funny, because it means they'll give you back money you didn't pay. That's not a refund, that's a donation.
------------------------
Personal attack - out for a week
Senior Anandtech Moderator
Common Courtesy
ViviTheMage
Lifer
sweet, the year after I graduate....
evident
Lifer
sweet. i spend about $6000 a year on grad school classes. always nice to get some of that back!!!! :thumbsup:
we can bitch about the stimulus bill all we want, but any investment in education is a good thing in my opinion. i'd rather them give out $5000 for education than spend $4b on chrysler and gm
we can bitch about the stimulus bill all we want, but any investment in education is a good thing in my opinion. i'd rather them give out $5000 for education than spend $4b on chrysler and gm
sactoking
Diamond Member
Ok, here's the deal as best as I can find right now:
Hope Credit-
Full credit available for individuals with income $48,000 or less ($96,000 for MFJ)
Phases out between $48,000 and $58,000 ($96,000-116,000)
Unavailable over $58,000 ($116,000)
100% credit for first $1,200 in expenses
50% credit for next $1,200 in expenses
Maximum yearly benefit of $1,800
Only available for first two years of postsecondary education
Must pay taxes to be eligible
Non-refundable
Lifetime Learning Credit-
Same income thresholds as Hope Credit
20% credit for first $10,000 in expenses
Capped at $2,000 benefit annually
Available every year of postsecondary education
Available for courses at approved schools to improve job skills
Non-refundable
Cannot be claimed with the Hope Credit for the same dependent
And you'll love this new credit:
American Opportunity Tax Credit-
Applies to tax years 2009 and 2010
AMENDS the Hope credit as follows:
*Amount increased to 100% of the first $2,000 in expenses
*Amount increased to 25% of next $2,000 in expenses
*Annual limit increased to $2,500
*Timeframe increased to first FOUR years of postsecondary education
*"Qualified tuition and related expenses" amended to include "required course materials" (i.e., books, etc)
*AGI limits increased to $80,000 ($160,000)
*AOTC CAN be claimed against AMT
*Up to 40% of the qualified credit is refundable
Link
Starts on page 15.
Hope Credit-
Full credit available for individuals with income $48,000 or less ($96,000 for MFJ)
Phases out between $48,000 and $58,000 ($96,000-116,000)
Unavailable over $58,000 ($116,000)
100% credit for first $1,200 in expenses
50% credit for next $1,200 in expenses
Maximum yearly benefit of $1,800
Only available for first two years of postsecondary education
Must pay taxes to be eligible
Non-refundable
Lifetime Learning Credit-
Same income thresholds as Hope Credit
20% credit for first $10,000 in expenses
Capped at $2,000 benefit annually
Available every year of postsecondary education
Available for courses at approved schools to improve job skills
Non-refundable
Cannot be claimed with the Hope Credit for the same dependent
And you'll love this new credit:
American Opportunity Tax Credit-
Applies to tax years 2009 and 2010
AMENDS the Hope credit as follows:
*Amount increased to 100% of the first $2,000 in expenses
*Amount increased to 25% of next $2,000 in expenses
*Annual limit increased to $2,500
*Timeframe increased to first FOUR years of postsecondary education
*"Qualified tuition and related expenses" amended to include "required course materials" (i.e., books, etc)
*AGI limits increased to $80,000 ($160,000)
*AOTC CAN be claimed against AMT
*Up to 40% of the qualified credit is refundable
Link
Starts on page 15.
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