Tax credit provides relief from student textbook costs
Most students, or at least their parents, will be in line for free money if they buy books during the current school year.
Thanks to this year’s American Opportunity Tax Credit, students and parents will be able to claim up to $2,500 on their taxes in fees incurred from textbook and other course materials.
"We’ve been really pressing that students know about it [the tax credit] because it is not permanent and will only be counted on the 2009-2010 taxes," said Bookstore Manager Rhea Cain, "but the president has proposed to make it permanent in the future."
To be eligible, students must be in their first four years of college. Also, they must make less than $80,000.
If a student is claimed on their parents’ taxes and they file jointly, their combined income cannot exceed $180,000.
Besides meeting those applicability requirements, students must also keep their receipts. Course materials only can be counted if they are not covered by scholarships or grants.
"They have to be valid sales receipts and a copy of your bank statement doesn’t work," said Cain. "Receipts are void for books they have returned."
The government suggests that students keep transcripts, lists of course materials, and canceled checks as well as the required receipts.
Course materials include anything required for classes from textbooks down to yoga mats and calculators. As long as students can prove that materials were required for the course, they can be counted on the tax credit.
The way in which the American Opportunity Tax Credit works allows for the first $2,000 to be counted 100% on taxes and the next $500 at 25% for a total of $2,500.
"If you have $2,000 and a good chunk of that goes to books, you could potentially get a lot of your money back," said Cain.
Sophomore Joni Fitch said the tax credit will help ease the financial burden.
"If you have a lot of scholarships but have extra expenses and you are paying for a lot of books, it will help. If you are coming from a family that might not necessarily be able to help you out, it can help you later by saving you that money," said Fitch. "For me it will be great."
Not all students will reap the benefits of this program, however. Some aren’t even aware of it.
"I think it’s a great idea. It gives students or their parents somewhat of a break on the expenses of college. And I’m not sure why I didn’t know about it. Possibly I am just not up to date on new bills and regulations," said junior Aaron Moore.
So far most of the questions have come from parents who still claim their kids on their taxes at this point.
Differences from this year’s tax credit, now called the American Opportunity Tax Credit, previously the Hope Credit, allows for the credit to be claimed for the first four years of college as opposed to the first two.
