IR-2017-163: IRS Reminds Parents, Students to Explore Education Resources on IRS.gov
Internal Revenue Service (IRS) sent this bulletin at 09/27/2017 12:18 PM EDT
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Issue Number: IR-2017-163Inside This IssueIRS Reminds Parents, Students to Explore Education Resources on IRS.gov WASHINGTON – The Internal Revenue Service today reminded parents and students that there are many tax benefits available to them, and the easiest way to learn more about them is through the education resources available on IRS.gov. Besides tax credits such as the American Opportunity Tax Credit and the Lifetime Learning Credit, there are other education-related tax benefits that can help reduce a taxpayer’s tax liability. Savings plans, such as 529 plans, also offer tax-free ways to save for a student’s qualified education expenses. Deductions: Student Loan Interest Deduction If a taxpayer’s modified adjusted gross income (MAGI) in 2017 is less than $80,000 ($165,000 if filing a joint return), there is a special deduction allowed for paying interest on a qualified student loan used for higher education. This may include both required and voluntary interest payments. Eligible taxpayers can claim this deduction even if they don’t itemize their deductions on Form 1040 Schedule A.
Business Deduction for Work-Related Education A taxpayer who is an employee and can itemize their deductions may be able to claim a deduction for expenses they paid for work-related education. For self-employed workers, deduct expenses for qualifying work-related education directly from self-employment income. This reduces the amount of income subject to both income tax and self-employment tax. To claim a business deduction for work-related education, the taxpayer must:
Savings Plans: Qualified Tuition Programs (529 Plans) States may establish and maintain programs that allow taxpayers to either prepay or contribute to an account for paying a student’s qualified education expenses at a postsecondary institution. No tax is due on a distribution from a qualified tuition program unless the amount distributed is greater than the beneficiary’s adjusted qualified education expenses. Qualified expenses include:
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