Monthly Archives: December 2012

Tax Credits for Higher Education

Tax credits for higher education, are forms of educational assistance provided to students and or their parents to undertake payment of education expenses.

There are two types of recognized tax credits within the federal tax system overseen by the Internal Revenue Service and the federal government: The American Opportunity Credit and The Lifetime Learning Credit. To get access to this credit facility, one has to pay their post-secondary tuition for themselves, their spouse or their dependent. The credit may be claimed by the student or parent but cannot be claimed by both.

One can choose to claim either credit for each student in a single tax year, not both credits. For instance, one cannot claim The American Opportunity Credit to pay their child’s tuition and then claim the Lifetime Learning Credit for more school expenses. However, if one incurs education expenses on more than one student within the academic year, they can opt to seek either credit individually, with each student/year case taken separately.

The American Opportunity Credit

This is an improved version of Hope Educational Assistance Credit. It was created as a part of the 2009 Stimulus Bill, which was part of the federal government’s intervention process during the economic crisis of this period. Whereas it is improved, it does have a few limitations; one can only claim expenses incurred during the first four years of college. It is also temporary, unless the congress acts upon it, it will expire at the end of 2012.

Credit can be up to $2,500 per eligible student. 40% of the credit is refundable, meaning that; one may be able to receive up t0 $1,000 even if they owe no taxes. Expenses that meet this criterion include tuition, fees, textbooks related to the course and equipment like lab and measurement equipment.

The student must be pursuing an undergraduate course or other recognized educational credential. The student must also be registered as studying for a minimum of half the time of the projected study year. The full credit is generally available to Individuals who make less than $80,000 or $160,000 in the case of married couples wishing to file jointly.

The Lifetime Learning Credit

Like the name suggests, it is fairly flexible and open to any education activity that is taken after secondary level, or any additional job or skills courses taken thereafter.

Credit can be up to $2,000 per eligible student. The credit one has access to be limited to the amount of tax you are required to pay as part of the returns.

As mentioned above, this facility is not limited to degree courses but has a fairly wide educational access qualification basis. The expenses that can be covered by this facility include tuition and fees, textbooks and assorted equipment.

Taxpayers who make earn less than $60,000 or $120,000 for married couples wishing to file a joint return can access the full breadth of this credit as well.

Links:
http://www.irs.gov/newsroom/article/0,,id=218389,00.html
http://news.yahoo.com/tax-credits-higher-education-080023894.html

How to Stock Up and Save

As a college student, you will begin buying things you did not previously have to worry about, such as toilet paper and groceries. These things can sometimes be expensive and rarely go on sale. This means that you have to be aware of the sales and stock up while you can! Here are a few items to keep an eye out for sales!

Stock up and Save

1. Toilet paper

Toilet paper is an interesting product. You can by the cheap kind and risk chaffing and other uncomfortableness, or you can spend big bucks on the softest and most comfortable kind and really bring up your total at the cash register. Personally, I would rather spend more and avoid any unfortunate side effects of the cheap brand. Watch for sales and stock up while you can!

2. Soda

Soda or other beverages can really add up. Water bottles, Gatorades, Arizona Sweet Tea, Coca-Cola and Pepsi products go on sale rather often. Store and off brand products are almost always cheaper than name brand and usually are made by the same companies creating the name brand companies. Stock up on the beverages when you can! You can even recycle the bottles and cans and get money back to put towards your next purchase!

3. Toiletries

I do not know about all of you, but my wonderful Mother almost always purchased my shampoo, conditioner, soap, tooth paste, and other toiletries for me while I still lived at home. Now that I am buying these things on my own, I realize just how quickly they eat up my checking account. Hit up these sales whenever possible and you will never have to worry about not having something when you need it!

4. Favorite snacks

Crackers, chips, cereal, and cookies are all college favorites. If you are burned out on Ramen noodles and soup, sales on these items can be your relief! Sales on these items can come up often, but be sure to look for manufacturer coupons as well, to bring the price down even lower!

5. School Supplies

I lose my pens and pencils almost weekly. I go through notebooks and loose leaf paper like nobody’s business. So I am constantly watching for sales on school supplies. Better to over stock and have more for next semester, than be scrounging for writing utensils your last few weeks of classes!

Stock up and save on all these items and you will thank me later. Do not forget to watch for coupons as well! Sign up for sites, like Groupon, that will send you coupons for local products. Pick up a copy of your grocery store’s weekly ad and leaf through all the deals. Saving money is as easy as that.

How to Juggle College Finances

With disposable income becoming a bigger and bigger problem both in the United States and globally and inflation and the economic situation increasingly unpredictable, investment in aspects of our lives like education is becoming harder to manage.

college finances

College education, of course, makes a critical the most important part of one’s education and is traditionally a major source of concern for the majority of families in the United States.

College education represents an expense process that covers many facets, and for a lot of people, the one thing that is focused on is tuition fees. Of course tuition forms a critical part of one’s college education but several other expenses play a role as well, without which the college degree may be encumbered or possibly not even achieved.

Apart from tuition fees, colleges have different fee structures that include registration, and access to different facilities at the university that may not be included in the tuition fees structure.

Daily living expenses are also important, as one needs to take into consideration meals, accommodation, transportation and things of that nature. Study materials, like text books and laptop computers cannot be ignored either.

All these and many more mean the study process for a college student is a difficult and expensive one for a lot of people.

However, there are a number of ways of reducing the cost implications covering the requirements of a college education.

Keeping the college choice within your state of residence or home states cuts back on transportation costs considerably and makes access to scholarships easier especially if you focus on those which are within your locality; people tend, surprisingly, to ignore these.

You can also consider the advantages, cost-wise, of using community college, which have particularly pocket friendly tuition rates and permit one to carry college credit accumulated in high school.

Applying for Free Application for Federal Student Aid doesn’t hurt at all, especially if you have more than one child attending college. You may just fall through the cracks or the criteria can include you because of the obvious implied financial strain.

Once in college, it is important for the student to remain focused on his or her studies and goals. All those extra semesters or papers carried forward imply additional costs that add to your financial load. Some universities also offer programs that help you save or recoup on certain costs like tuition, travel costs for visiting family as well as text books (http://www.usnews.com/education/best-colleges/articles/2011/08/24/colleges-offer-hidden-savings-to-students). It helps to be on the look out for such initiatives.

Being prudent with your money at this point in your life is always going to be a challenge but it forms an integral part of learning financial discipline. Look out for student discounts in college towns, which are usually on offer at restaurants, shops and clubs. Prioritize your technical needs, for instance, do you really need to have a printer in your room? Make the most of what the college does offer you, like meals which make an unnecessary dent in your personal expense account when you eat out.

When looking to cut costs or save, it’s more often than not, the little things that actually count and the same applies to college-related expenses.

Tax Filing Tips

Filing tax returns is the single most frustrating task for most Americans. Still, every citizen has an obligation to do it. Admittedly, it is not the simplest thing to do and the average person spends more hours than they can afford preparing their taxes. Add to that the many mistakes one is bound to make. With these tips, we hope that you will be able to less time preparing taxes and avoid some of the most common mistakes.

Tax filing tips
Tax filing tips

To help you along, here are the Income-related documents you need to have:
– Form W-2 for employers you and your spouse worked for during the year
– Forms 1099-MISC for miscellaneous income
– Forms RRB-1099 for Social Security/RR1 benefits
– Forms 1099-R for Retirement Plan Distributions such as pensions, IRAs and annuities
– Schedules K-1 for Partnership, Corporation and trust income
– Forms 1099-G for unemployment compensation

If you have investments, you will need to have these forms:
– Form 1099-B to declare the proceeds from sale of stock and other indices
– Form 1099-INT to declare interest income
– Form 1099-DIV to declare dividend income

Homeowners need Form 1098 for mortgage interest and Form 1099-S showing the sale of your home or other real estate property. If part of your mortgage debt was cancelled, you must indicate it in Form 1099-C. If the cancellation was on your main residential house, you are exempt from paying tax. You will need to fill Form 982 for this.

If you are not hiring a tax preparer, use tax software for your tax calculations. It is so much easier than doing the math on your own and will help you avoid many mistakes. Check every angle for deductions you could qualify for which can make a huge difference in the amount of taxes you end up paying, from medical and self employed health insurance to work-related, property, real estate, and state tax deductions.

To meet the deadline and avoid penalties, pay as early as possible. If you have no time to file by the due date, ask for an extension via Form 4868. Note that this is for filing only, not paying. Your payments must still be made by the IRS deadline.

 

How to Pick Charities to Donate To

The decision to donate to a charity is not just a noble one; it is a reflection of empathy on one’s part and an understanding that where one has been blessed by fate, others have been less fortunate. So for those seeking to improve the lot of humanity, to give back, for those seeking to “be the change they seek”, there are a number of pointers that can ensure that their gestures actually have the impact they have in mind and reach their intended target.

Choose a charity

The method of choosing which charity to donate to that are outlined below are not perfect methods but they will offer a guideline that can help one make an informed decision on how to impact the world around them.

(Credibility. Efficacy. Community Neighborhood. Immediacy. Passion. Anonymity)

Credibility

It is important that you choose a charity that has gone through a vetting process of some sort. This process varies from one area to another but certain aspects of the vetting process are fairly easy to spot: the charity should be registered, and have a recognizable board and patronage of standing within the community; it’s activities and how it puts it’s resources to use should be transparent, and easily accessible financial records play an important role in this; it’s impact should be visible, and not simply at a PR level but intrinsically, in line with it’s stated vision and goals.

Efficacy

The charity should be able to actually effect change in the individual lives and communities it works with. It is all very well to provide shelter for the homeless, but alongside this, those sheltered should find a system that helps them better themselves so that they move on to a way of life that helps them earn a living and provide for themselves so the shelter can help another lost cause.

Community

The charity should be impacting directly on the community it exists in. Global charities naturally have global reach, but to actually work, charities need to experience the reality of the people whose lives they are seeking to have an impact on.

Immediacy

There are sometimes situations that demand an instant response from the community, whether local, nationwide, or even globally. These often occur during natural disasters like earthquakes, outbreaks of disease and tsunamis. In this particularly situation, creditable organizations like the United Nations make impromptu calls for immediate help and these are calls that one should respond to when seeking to donate. In this particular scenario, every dollar counts, and the immediacy of the situation also validates it.

Passion

One should also find a charity that appeals to one’s passions, or beliefs. It is easier to relate to a cancer charity, for example, if you have suffered from the disease or have known somebody who has been ravaged by it. The things we are passionate about are often the ones we are also most effective with.

Anonymity

As much as possible, do seek a charity that ensures the donor remains anonymous. It gives real meaning to your offer; the reward is in you yourself knowing.