Online Scholarships Can Be The Key To Your Future!

It seems the nation is so concerned about the high cost of higher education even the Internal Revenue Service is stepping in to provide a little relief. The IRS is not only administering a series of tax credits, but also giving students - or their equally strapped parents - a series of income tax deductions. Those attending distance learning program classes and traditional on campus schools should explore these credits.

After all, getting a degree without taking some sort of loan is near impossible these days. True, the loans usually allow a grace period after graduation before one must pay them back, but many of them are so exorbitant they leave graduates cash strapped for decades. With these deductions, the IRS puts some money back into a student’s pocket.

The first thing the IRS did was make it possible for more people to claim these deductions. They increased the phase out limit, or how much you can earn and still be able to file for a deduction. Before 2009, the limit for single claimants was $55,000 adjusted gross income for full deductions and from $55,001 to $70,000 for partial deductions. For people filing joint returns, the ceilings were $110,000 and $145,000 respectively. Starting with this year, the limits are now $60,000 and $75,000 for individuals and $120,000 and $150,000 for joint returns.

One thing to consider is one must have attended an accredited, "qualified" institute of higher learning, and the student must be going to the school on a minimum half-time basis. The university can be either an on campus or online college. From there, the college loan must be applied to paying a pretty broad list of items, including tuition, fees, equipment, room and board and travel.

It should also be noted that the IRS will not allow any deductions if the money is from immediate family. They also won’t allow the deductions if it’s part of an education program from one’s place of employment. There is also a cap on how much one can deduct to the tune of $2,500 per year.

After keeping all these conditions in mind, calculating the deduction is a pretty simple matter. For instance, if a single person earns under $60,000 that tax year, the first thing to do is get a statement from the lending institution. Break down what was paid to the principle from the interest. Then deduct the interest paid with a 1098-A form. If it’s between $60,001 and $75,000, the IRS’s web site has a pretty easy formula to figure out what percentage can be deducted. If one’s filing a joint return, substitute the respective numbers regarding the various phase out numbers.

There are other provisos one should always be mindful of, some of which can increase one’s number of deductions. A solid suggestion is to find a qualified tax person to help with figuring out what’s deductible and what’s not.

As said before, with the recession being what it is, one can use all the help one can get. The economy is forcing many to go back to school or attend to get the degree they never got before. Traditional campuses and schools online participants should explore what is available in the way of grants for online college before beginning school and then look at these credits to see how they apply. There is more information about online college course on the internet.