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Important 2006 Federal
Income Tax Information
for Our Students and Their Families |
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Tuition
Deduction for Higher Education Expenses Retroactively Extended
The good news is that late in December, Congress chose to extend
legislation that allows for the deduction of higher education
expenses in 2006 and 2007. The bad news is that by passing the bill
so late in the year, there was little time to draft clear
instructions for filing taxes for the 2006 tax year. We have
outlined the following steps to help you take advantage of this
important deduction.
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Timing is Key |
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The IRS
will not process returns that claim the tuition deduction
until after February 3, 2007, so please wait until after
that date if you plan on taking the deduction and have not
yet filed. |
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Paper
returns already filed will be held until February 3, and
electronic returns filed prior to that date will be rejected
and a new return will need to be submitted. |
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A detailed
description of filing instructions is available on the IRS
Web site at
http://www.irs.gov/newsroom/article/0,,id=165640,00.html
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Why Bother? What’s it Worth to
Me? |
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The tuition
deduction is worth up to $4,000 of college tuition and fees,
and can be claimed by single taxpayers earning $65,000 or
less. Married/joint filers earning $130,000 or less also may
claim the deduction. |
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Where on the Form 1040 Can I
Claim the Deduction? |
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The tuition
deduction must be claimed on line 35 of the 1040, under the
category of “domestic production activities”. You must put a
“T” for tuition on the entry line. |
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Please Note: |
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Your family
may qualify to use either the
Hope or the
Lifetime Learning tax
credits instead. Your tax advisor can tell your family which
benefits you most, based upon your income and year in
college. Both the Hope and Lifetime Learning tax credits
appear on all 2006 tax forms, and were not affected by this
late-December deduction change. |
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Different
rules apply if you are claiming multiple deductions on the
domestic production activity line. See the IRS Web site link
above for detailed instructions. |
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Note that
this is not official guidance, and has not been reviewed by
tax counsel. Please consult a trusted tax advisor for
applicability to your particular tax situation. |
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The
Office of Financial Aid at Schreiner University is committed to
assisting students in obtaining the best financial aid award possible.
However, it is the student’s responsibility to comply with all
requirements necessary to complete the financial aid process. In
addition, the Office of Financial Aid is not responsible for the
student's financial obligations to Schreiner University. Each student
must verify their account balance and make arrangements for any amounts
not covered by financial aid. |
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