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Credits provide college
money
By Mark Richmond
Senior
Writer
Students can save thousands of dollars every year
simply by learning about their taxes. A recently passed tax provision,
the Hope Scholarship Tax Credit, provides thousands of dollars of assistance
per year to college attendees.
Purdue Bursar Rich Wells said, "The Hope Tax
Credit (was authorized) under the act entitled ‘The Taxpayer Relief
Act of 1997.’"
Wells said this is a program whereby the student
or parent can take a tax credit on their U.S. federal income tax returns
for certain educational expenses.
Wells also stated that the IRS has specific regulations
that determine who can take these federal income tax credits. According
to a Purdue Web site, "The Hope Scholarship Tax Credit helps make
the first two years of college or vocational school university available.
Students will receive a 100 percent tax credit for the first $1,000
of tuition and required fees and a 50 percent credit on the second $1,000.
This credit is available for tuition and required fees less grants,
scholarships and other tax-free educational assistance."
The tax credit is reduced for families with an
income between $80,000 and $100,000, and for individuals who have incomes
between $40,000 and $50,000. Thus both families and individual students
who are paying their way through school can benefit; taxpayers can claim
a credit for their own tuition expense or for the expenses of his or
her spouse or dependent children.
The Web site also gives an example of how a married
couple can claim a tax credit under the law. For example, a married
couple with an adjusted gross income of $60,000 have two children in
college at least part-time, one at a community college with a tuition
of $2,000 and the other a sophomore at a private college with tuition
of $11,000. Using the Hope Scholarship Tax Credit, this couple would
have their taxes cut by as much as $3,000.
Wells said that although Purdue is unable to give
tax advice, students can find more information about tax credits on
the Web. "Students can pick up a great deal of information about
(the Hope Tax Credit) in a variety of ways," said Wells. "Students
can click on the ‘Financial’ and ‘Tax Credit’ sidebars
on SSINFO to view their own IRS Form 1098-T information.
"We printed the Form 1098-Ts over the weekend
along with supplemental information, and we are in the process of mailing
this to students. However, students can look into SSINFO and get the
same information right now without waiting on the mail."
Students can find information about the law itself
at http://www.adpc.purdue.edu/edtaxinfo/welcome.htm.
Wells said, "This site has a wealth of information
about (the Hope Tax Credit) with links to several other sites including
the IRS. The IRS site gives the user the ability to print off federal
income tax publications and forms."
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