TurboTax Student Tax Software Helps Save With Tax Deductions
Taxes on top of homework, who needs it? School is difficult enough without the endless costs associated with getting your degree. Let TurboTax help you keep more of your money by helping you find and take tax deductions that are designed to help students offset the ever increasing financial burden for education.
When you use TurboTax to prepare and file your tax return, you get the benefits of fully guided tax filing that gives you a friendly FAFSA view of your taxes that you can print and review to see how you can save money on your taxes.
With TurboTax you can see if you qualify for a tuition deduction that can reach up to $4,000 in tax savings aid.
This student tax deduction is available to tax filers whether they itemized their tax deductions or not. For more information about how you can take advantage of tax breaks designed specifically for students, you can visit TurboTax Online Support.
Tax breaks for students include several student loan tax credits along with deductions that are also available for the interest payments you make when repaying your student loan.
Student Tax Credits and Deductions
Student tax deductions can help you make the grade when it comes to education affordability. With ever growing expenses related to higher education, it's nice to know there is financial help available through the government. Here are a few tax saving tips that could help you stomp out some of those budget stretching expenses.
- Exclude the Pell Grant you were awarded from taxable income. You donít need to include the Pell grant amount in your federal taxable income unless you used the money for unapproved purposes. Generally, Pell grants fall into tax-free status if you are a degree candidate in college and only use the funds to pay for tuition, fees, books, supplies and related school equipment. However, room and board or school-related travel expenses must be treated as taxable income.
- Exclude government student loans from taxable income. Student loans are not treated as taxable income. However, when repaying these loans, you may qualify to apply a student loan interest deduction if your income limits qualify and the funds are used for school-related expenses while you are in college.
- Evaluate the state financial assistance awards you received through FAFSA. Grants received from your state that you donít repay are treated just like a Pell grant, so long as you use the funds properly, these student loans are excluded from your taxable income.
Form 1098-E: Student Loan Interest
Student loan interest is reported on Form 1098-E Student Loan Interest Statement which may enable you to deduct part of your student loan interest on your federal tax return. Lenders are required to report how much interest you pay annually.
Student loan interest deductions are taken as an adjustment when calculating adjusted gross income, or AGI. The interest payments you make during the year must be on a student loan for yourself, your dependents or spouse.
If you use TurboTax Tax Software to prepare and file your tax return, you donít need provide any of these calculations on your own. TurboTax software handles all the calculations within the tax program, and fills out the appropriate tax forms.
Enrolling in school can be quite expensive for the average taxpayer. TurboTax will help you ease the financial burden by asking you a few simple questions about your education expenses and helping you reduce taxable income.