(UPDATE: The giveaway is now closed. We have our winners! See the comments for more info.)
Education tax credits can help you pay for the costs of higher education. Credits are great because they are dollar for dollar reductions in your taxes due as opposed to deductions which merely reduce your income subject to tax. Additionally, sometimes, as with the American Opportunity Credit, you can actually get money back with credits – even if you don’t owe any tax!
The American Opportunity Credit is more or less a souped up version of the Hope Credit. For 2014, the American Opportunity Credit is worth up to $2,500 per eligible student. An eligible student must be pursuing an undergraduate degree or other recognized education credential; be enrolled at least half time for at least one academic period that begins during the tax year; and may not have a felony drug conviction.
You cannot claim the American Opportunity Credit if someone else claims you as a dependent on his or her tax return.
As with the tuition and fees deduction (more on that later in the week), you can use money that you borrow in order to calculate the credit but you cannot claim the credit based on expenses paid with tax-free scholarship, fellowship or grant money, a Coverdell education savings account, tax-free savings bond interest or employer-provided education assistance.
Additionally, you can’t claim the tuition and fees deduction and the American Opportunity Credit for the same tax year.
You figure the credit by adding 100% of the first $2,000 of qualified education expenses you paid for the eligible student, and 25% of the next $2,000 of qualified education expenses you paid for that student.
Forty percent of the American Opportunity Credit may be refundable. This means that if the refundable portion of your credit is more than your tax, the excess (up to $1,000) will be refunded to you – even if you owe zero tax.
For purposes of the credit, qualified education expenses do not include amounts paid for insurance, medical expenses (including student health fees), transportation, room and board, and similar personal, living, or family expenses – even if the payment of these expenses are a condition of enrollment or attendance.
Qualified expenses do include tuition and fees required for enrollment. Expenses may include a computer and other technology-related accessories if those are needed as a condition of enrollment or attendance at the educational institution. Expenses also include amounts paid to the institution for course-related books, supplies, and equipment. That said, for purposes of the American Opportunity Credit, expenses for books, supplies, and equipment needed for a course of study are included in qualified education expenses whether or not purchased from the educational institution, which is a bit different than the definition of qualified expenses for most educational tax breaks.
And that brings us to our next giveaway! Mead and Five Star will provide a complete school supply pack to each of two readers. The prize package will include:
- 7-pocket Expanding File
- Five Star Style Notebooks (3)
- Five Star Notebook (2)
- Five Star Flex Hybrid Notebinder
- Five Star 15-pocket Folder
- Five Star Wireless Notebook
Mead® is part of the ACCO Brands family of industry-leading planning solutions. Mead® products help busy people plan and organize their lives, while Five Star® and Trapper Keeper® products give students the high-quality learning tools they need to succeed in the classroom.
To enter to win, just post a comment below telling me your favorite school supply ever. I’ll go first to get you started: I had a blue Trapper Keeper notebook with a rainbow on the front. Clearly, it was awesome which made me cool by default (this is how I choose to remember it).
Entries must be posted in the comments section for this blog post in the space below by 10:00 p.m. EST on September 20, 2014. It’s just that easy. I’ll choose two winners randomly (using a number generator) out of all of the qualifying entries.
Be sure and read the fine print for more rules because, as you know, I’m a lawyer and I like rules:
-
Don’t panic if your comment doesn’t show immediately. If it goes to moderation because, for example, you’re new here, the time stamp on your comment is what counts.
-
I love my Twitter followers and my Facebook fans but for this particular giveaway, tweets and Facebook comments will not be counted. Ditto for emails. You must leave your comment on the blog at this post.
-
You can enter as many times as you like but you must leave a different answer each time you comment.
-
Offensive comments or comments that otherwise violate the comment policy will be deleted and will not be considered valid for purposes of the contest. Similarly, pingbacks and other links will be disregarded for purposes of the contest.
-
I will need your full name and your email address: be sure to use your real information when you register to leave a comment. I won’t publish your email address but I do need contact information for the winning entry. If you win and I can’t reach you, it’s a forfeit.
-
Due to shipping considerations, you must have a valid United States address. Sorry, Canada, eh?
-
I respect your privacy and I will not send you anything unrelated to your entry in this contest. By entering the contest, you agree that I may post any part or all of your submission including your name as a part of the contest announcements or promotions, with the exception of your email address.
-
Like Judge Judy, my determination is final.
-
Prizes are provided directly by our sponsors and are not exchangeable or redeemable for other prizes. Sponsors do not pay for placement and do not receive any compensation for contributions – neither do I! I have no affiliation, paid or otherwise, with any of our sponsors.
-
If you aren’t allowed to participate in giveaways because of the laws in your state or your age or an agreement you’ve made with your mother, consider this giveaway not applicable to you. In other words: void where prohibited or restricted.
Comment away! And thanks for participating in Back To School 2014!
