College and Students

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The American Opportunity Credit pays you back, in the form of a credit, for 100% of your first $2,000 of qualified education expenses for yourself, your spouse, or your dependents paid in 2014. It also pays you back 25% of the next $2,000 you spend on higher education, for a total credit of $2,500 per student, per year.

American Opportunity Credit

To claim the American Opportunity Credit, the student must be in the first four academic years of postsecondary education at an eligible school. It doesn't matter how many calendar years the student has been in school, as long as he or she is in still the freshman, sophomore, junior, or senior year. The student must also be enrolled at least half-time in a program leading to a recognized credential, such as a degree, and cannot have had a felony conviction for possessing or distributing a controlled substance. You can only take this credit for a student for four years.

You may qualify to take the American Opportunity Credit regardless of the amount of tax you owe. Up to $1,000 of this credit is refundable. For example, say you had no income tax withheld and you owe no taxes. You could still get up to $1,000 back for the American Opportunity Credit if you meet the requirements. TaxACT calculates the credit, including any refundable portion, for you.

If you don't qualify because, for example you are not working on a degree or other credential, or you don't meet the half-time requirement, you may be able to take the Lifetime Learning Credit. This credit gives you 20% back of up to $10,000 in qualified expenses.

Lifetime Learning Credit

The maximum Lifetime Learning Credit you can take is $2,000, regardless of how many students are on your return.

You cannot claim the American Opportunity Credit and the Lifetime Learning Credit for the same student, in the same year.

TaxACT calculates your American Opportunity Credit and the Lifetime Learning Credit on Form 8863, Education Credits.

Tuition and Fees Deduction

Another tax benefit for education is the Tuition and Fees deduction, which helps offset costs of qualified education expenses. You can reduce your taxable income by up to $4,000 in qualified education expenses, even if you don't itemize deductions. This deduction is an adjustment to income on the first page of your Form 1040. Because it reduces your adjusted gross income, it may also help you qualify for other tax breaks on your return that are based on that amount.

You cannot use the Married Filing Separately filing status and take the education credits or deduction. Your credit or deduction is reduced or eliminated at higher income levels.

The deduction does not include room and board and other expenses. In addition to tuition and fees, it only includes books, supplies, and equipment you are required to purchase.

You should receive Form 1098-T with information about your tuition expenses for the year in January or February from the school. TaxACT asks you if you paid tuition costs for yourself, your spouse, and your dependents and determines, based on your information, the education tax breaks for which you qualify.


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March 2015
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Upcoming Tax Dates

March 2All businesses
File information returns (for example, Forms 1099) for certain payments you made during 2014.

March 2Farmers & fishermen
File your 2014 income tax return (Form 1040) and pay any tax due - Details

March 2Payers of gambling winnings.
File Form 1096 along with Copy A of all the Forms W2G you issued for 2014. If you file Forms W2G electronically, your due date for filing them with the IRS will be extended to March 31. The due date for giving the recipient these forms remains February 2.

March 2 All employers
File Form W3, Transmittal of Wage and Tax Statements, along with Copy A of all the Forms W2 you issued for 2014. If you file Forms W2 electronically, your due date for filing them with the SSA will be extended to March 31. The due date for giving the recipient these forms remains February 2.

March 2 Large food and beverage establishment employers
File Form 8027, Employer's Annual Information Return of Tip Income and Allocated Tips. Use Form 8027T, Transmittal of Employer's Annual Information Return of Tip Income and Allocated Tips, to summarize and transmit Forms 8027 if you have more than one establishment. If you file Forms 8027 electronically, your due date for filing them with the IRS will be extended to March 31.

March 2 Wagering tax
File Form 730 and pay the tax on wagers accepted during January.

March 2 Heavy highway vehicle use tax
File Form 2290 and pay the tax for vehicles first used in January.

March 10 Employees who work for tips
If you received $20 or more in tips during February, report them to your employer - Details

March 11 Communications and air transportation taxes under the alternative method.
Deposit the tax included in amounts billed or tickets sold during the first 15 days of February.

March 13 Regular method taxes
Deposit the tax for the last 13 days of February.

March 16 Corporations
File a 2014 calendar year income tax return (Form 1120) and pay any tax due - Details

March 16 S Corporations
File a 2014 calendar year income tax return (Form 1120S) and pay any tax due - Details

March 16 S Corporation election
File Form 2553, Election by a Small Business Corporation, to elect to be treated as an S corporation beginning with calendar year 2015. If Form 2553 is filed late, S corporation treatment will begin with calendar year 2016.

March 16 Electing larger partnerships
Provide each partner with a copy of Schedule K1 (Form 1065B), Partner's Share of Income (Loss) From an Electing Large Partnership, or a substitute Schedule K1. This due date applies even if the partnership requests an extension of time to file the Form 1065B by filing Form 7004

March 16 Social security, Medicare, and withheld income tax
If the monthly deposit rule Page 6 Publication 509 (2015) applies, deposit the tax for payments in February.

March 16 Nonpayroll withholding
If the monthly deposit rule applies, deposit the tax for payments in February.

March 25 Communications and air transportation taxes under the alternative method.
Deposit the tax included in amounts billed or tickets sold during the last 14 days of February.

March 27 Regular method taxes
Deposit the tax for the first 15 days of March.

March 31 Electronic filing of Forms W2
File copies of all the Forms W2 you issued for 2014. This due date applies only if you electronically file.

March 31 Electronic filing of Forms W2G
File copies of all the Forms W2G you issued for 2014. This due date applies only if you electronically file.

March 31 Electronic filing of Forms 8027
File Forms 8027 for 2014. This due date applies only if you electronically file.

March 31 Wagering tax
File Form 730 and pay the tax on wagers accepted during February.

March 31 Heavy highway vehicle use tax
File Form 2290 and pay the tax for vehicles first used in February.

March 31 Electronic filing of Forms 1097, 1098, 1099, 3921, 3922, and W2G.
File Forms 1097, 1098, 1099, 3921, 3922, and W2G with the IRS. This due date applies only if you file electronically. Otherwise, see March 2. The due date for giving the recipient these forms generally remains February 2. View More Tax Dates