Jackson Hewitt(R) Franchise Urges Taxpayers to be Smart About Expiring Education Credit
PARSIPPANY, N.J. // PRNewswire-FirstCall // -- Millions of students are heading back to classrooms to continue their education. But many will carry more than just books with them. Students around the country are strapped with significant tuition bills, and time is running out to claim an important education credit that is set to expire at the end of 2010.
The American Opportunity Credit, available for the 2009 and 2010 tax years only, lets higher education students claim a credit of up to $2,500 for qualified tuition and related expenses. The credit can be claimed for the first four years of a student's postsecondary education, provided that the student is enrolled at least half time in a qualified program and has not been convicted of a felony drug offense. Expenses that are covered through this credit include tuition, required fees and the cost of required books and software for courses.
"The American Opportunity Credit is an important one for many students," explained Mark Steber, chief tax officer, Jackson Hewitt Tax Service. "Getting this refundable credit makes a difference in covering education costs, so it is important for you to claim the credit during this last year of its existence if you are eligible."
"If you are not eligible for the American Opportunity Credit, speak to a tax preparer to see if you can claim the Lifetime Learning Credit. This is a nonrefundable credit that is available to anyone who is taking classes, but it does not have the same strict criteria as the American Opportunity Credit," added Steber. "However, keep in mind that a taxpayer cannot claim both a Lifetime Learning Credit and American Opportunity Credit for the same individual in the same year."
Additional considerations to keep in mind regarding education tax deductions and credits include:
- Student loan interest deduction: You can deduct up to $2,500 of the interest paid on a student loan to attend a qualified education institution. The loan can be for yourself, a spouse or a dependent.
- Expiring education provisions: The deduction for up to $4,000 in tuition and fees and the $250 educator expense deduction both expired on December 31, 2009. "We are closely monitoring legislation for an extension to these and other provisions that have expired," said Steber. "However, as of now, taxpayers who may have claimed these deductions in the past should know that this is not possible to do on a 2010 tax return."
About Jackson Hewitt Tax Service Inc.
Jackson Hewitt Tax Service Inc. (NYSE: JTX), with more than 6,400 franchised and company-owned offices throughout the United States in the 2010 tax season, is an industry leader providing full service individual federal and state income tax return preparation. Most offices are independently owned and operated.
SOURCE Jackson Hewitt Tax Service Inc.