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Completed Schooling? The Hope Scholarship is Waiting For You!
It is a tax credit for you! The Hope scholarship is not a scholarship but it is a non refundable tax credit. So you can deduct this amount from your tax liability. There are certain conditions to avail this tax credit. If you or your family wants to avail this credit, you must file the federal tax return and you must owe taxes. Naturally families or students who are not paying any taxes cannot get any benefit from this credit. If you or your family owes fewer taxes than the amount of hope credit, then you are entitled to only a credit equal to the taxes you owed. Criteria for eligibility The person claiming this credit must be an eligible student. And the student must be enrolled for at least half time for a program leading to a degree course or a certificate course from an eligible school. He/she must not have completed the first two years of the study. The credit can be claimed by yourself or by another taxpayer claiming you as dependent. People convicted of a drug felony are not eligible for this credit. For the year 2008, the taxpayers cannot claim hope credit if their modified adjusted gross income (MAGI) is $58,000 or more ($116,000 for taxpayers filing jointly). This limit is increased by $1000 ($2000 for those filing jointly) for the tax year 2008. This credit is allowed for education expenses for a period beginning in 2008 or during the first three months of 2009. The amount of hope credit for an eligible student is a. 100 per cent of first $1200 of the expenses paid on education ($2400 for those in the Midwestern disaster area) plus b. 50 per cent of next $1200 of the expenses paid on education ($2400 for those in the Midwestern disaster area) You can take only one If you take this hope credit, you cannot claim lifetime learning credit at the same time. If you have received any other tax-free scholarship or other educational assistance to pay your educational expenses, you cannot take this credit. You cannot claim hope credit for expenses like the room and board, insurance, transportation, cost of books or equipments or any other student activity. Only tuition fees and related expenses which are required for enrollment are eligible for credit. If you're married and filing separately, you cannot claim hope credit from your taxes. Higher education expenses which are paid by proceeds of government subsidized loan expenses can qualify for hope credit if you have to repay the loan. If you are listed as dependent of another person in his/her tax return, then you cannot claim hope credit on your tax return. How to get it? Your educational institution will send you form 1098 -T showing the payments required to be made for educational expenses. This form is normally received by January 31 in a tax year. You need to complete part one and three of this Form and submit it with your tax Return. So if you are incurring expenses on higher education for yourself or your family, Uncle Sam lends you a hand. Chintamani Abhyankar is internet marketer, tax professional and freelance writer. He has done a lot of research on tax systems and is advising people internationally on various aspects of tax planning over last 25 years. His masterpiece, Stop donating your money to IRS is an e-book on the tax secrets which only lucky people knew in the past. His easy to implement strategies can put thousands of dollars in your pocket. Grab a copy now! Article Source:
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