Back to School Means Big Expenses
My children go to public school and are not in college yet, but that does not mean I will not feel a bite in my pocket book as I pay those books fees, technology fees, etc. For those of you that have children in private school or college I hear you laughing at me right now because my $700 in book fees is nothing compared to tuition expense.
Fortunately, there are several tax credits available for education. The biggest are the American Opportunity Credit and the Lifetime Learning credit which allows up to a $2,500 tax credit on your income tax returns. You can use college tuition for either credit, or if you are in your first four years of college and eligible for the American Opportunity Credit you can also deduct the cost of books.
For those of us without kids in college you can get up to $1,000 Indiana tax credit if you start saving for college now through an Indiana 529 plan. You receive a tax credit of 20% of your contribution up to a $5,000 contribution or $1,000 tax credit. Your future self and your children will thank you for planning ahead to help ease the burden when those big tuition bills start rolling in.
If your children are homeschooled or attend private school for grades Kindergarten through 12th grade in Indiana, you can take advantage of the Indiana Private school deduction which gives you a $1,000 deduction on your Indiana tax return (regardless of how much you spend for the private or home schooling).
Unfortunately, the cost of education is so high, but at least the tax code gives us a little relief. Hope you have a great school year!