It's almost time for school to start. For college students, or their parents, that means it's also almost time to start emptying out bank accounts.
OK, maybe you don't have to liquidate all your assets to go to college nowadays, but it is expensive.
Tuition is, of course, a major outlay. And most folks now pay for their continuing education by taking out loans. A lot of loans.
New York Federal Reserve figures show that student debt hit $1.2 trillion in the first quarter of 2015. School-related money is owed by about 43 million Americans.
That's why the ever-escalating cost of a college education has become part of the 2016 presidential campaign. Candidates vying for both the Democratic and Republican presidential nominations have offered ideas to help families pay for higher education.
Buying books, too: But tuition is just one, albeit a big part, of college. There also are all those dang books.
Yes, e-books have helped reduce costs somewhat, but not all required texts are in digital version or as cheap as students would like. And overall, according to an NBC News report, college textbook prices have risen 1,041 percent since 1977.
The reason for the skyrocketing texts price tags? Students are captive consumers.
"They have to buy whatever books they're assigned," Nicole Allen, a spokeswoman for the Scholarly Publishing and Academic Resources Coalition, told NBC News.
Publishers and book stores disagree. They point to not only digital book options, but also the options of buying used books or renting.
Still, books in all forms and from various sources will put a dent in students, and their parents', college budgets.
Uncle Sam can help.
Tax break for books: The American Opportunity Tax Credit, or AOTC, covers expenses for course-related books, supplies and equipment that are not necessarily paid to the educational institution.
It is the only federal tax credit that covers books required for college courses.
The AOTC is worth up to $2,500 per student for four academic years. You can claim $2,000 in qualified tuition and fees, plus 25 percent of the next $2,000 (that's $500 for folks who don't have a calculator handy) you pay for eligible schooling costs, like all those books.
Plus, up to $1,000 of the credit is refundable to lower income taxpayers.
The AOTC is just one of the many education tax breaks that can help cover educational costs for college or, in some cases, even lower grades. Details are in the latest Weekly Tax Tip, which offers a quick primer on education-related tax benefits.
Check it out, along with the other education posts here on the ol' blog; a sampling is listed below. A little bit of tax homework before school starts could pay off on your next return.
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Kay
Glad to be of service!
Chris Farrell
This is a good article to share with my students this semester. Thanks, Kay.
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