The Taxpayer Relief Act of 1997 provides $94 billion in tax cuts over five years. Several provisions are included in the measure that will benefit TMCC students. In January, TMCC will mail the 1098-T form to all students at the address on file at the college. Restrictions do apply. Contact your tax adviser or the IRS for more information.
Hope tax credit
Taxpayers may claim 100 percent of up to the first $1,100 spent in "out of pocket" tuition and fees (not books), and 50 percent of up to the second $1,100 in tuition and fees, for a total credit of up to $1,650. This is a per-student credit. Students must be at least half time (six credits) for a portion of the taxable year. The credit is only available for the first two years of postsecondary education.
Lifetime learning tax credit
This tax credit is a dollar for dollar tax credit against actual taxes owed for post-secondary education and beyond (including graduate and professional study). Beginning Jan. 1, 2003, twenty percent of up to $10,000 qualified tuition and related expenses are allowed for a maximum credit per family of $2,000. An individual may claim Hope or Lifetime Learning credits for a student, but not both.
Employer-provided education assistance
This allows an employer to provide up to a yearly maximum of $5,250 in educational assistance, which can be excluded from taxable income for both undergraduate and graduate courses. Payments do not have to be for work-related classes. If the employee's expenses are fully covered by this tax free program, the student cannot claim the Hope Scholarship or Lifetime Learning tax credit.
Student Loan Interest Deduction
Taxpayers can reduce their income subject to tax by up to $2,500 per year for qualified student loans. The amount of the deduction depends on the taxpayers income and is normally available for the remaining life of the loan. The student loan interest deduction is taken as an adjustment to income, which means you can claim tis deduction even if you do not itemize.
Call the IRS Taxpayer Assistance Line 1-800-829-1040 or consult your tax adviser .