Tax Tip of the Week | No. 265 | Back-to-School Tax Tips
Tax Tip of the Week | Aug 27, 2014 | No. 265 | Back-to-School Tax TipsAnother school year is upon us...
Most K-12 expenses are not deductible. This includes private school tuition and any required uniforms. For children under the age of 13, the cost of before or after school day care may qualify you for a tax credit.If you provide any volunteer services for your child’s school, your time is not deductible. However, you can take a charitable deduction for any volunteer miles that you drive (0.14/mile) or any out-of-pocket expenses.One of the best ways to save for college is to fund a “529” savings plan. You must invest in the Ohio CollegeAdvantage plan if you want to take a deduction on your Ohio tax return. Be sure to let grandparents know if they make contributions for their grandkids, they can also take a deduction on their Ohio tax return. These types of savings plan grow tax-free and distributions made for eligible college expenses are nontaxable.There are three different credits and deductions available for college expenses. These include: The American Opportunity Credit, the Lifetime Learning Credit and the Tuition and Fees Deduction. Each of these has its own set of rules that go beyond the scope of this Tax Tip.Once you are out of school, you may take a deduction of up to $2,500/year on the interest payments made on the loans.Good luck to all the returning students!
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