Extra value for your education buck
Aug. 12, 2013 – TaxTalk Blog
Who doesn’t like a good deal? Your day is made when that special DVD you’ve been looking for pops up in a “25% Off” bin. The BOGO sign – Buy One, Get One (free, half-off, other discount) always gets a second look, and warm, gooey breakfast samples passed out at your local grocery is a great way to start a morning.
Well, Indiana has some good tax deals when it comes to stretching your education dollars.
Save for college – You can make this the year to “get credit” for saving for a loved-one’s college tuition. With the CollegeChoice 529 education savings plan, you get a 20-percent state credit (up to $1,000) for contributions made this year. Visit the plan administrator’s site at www.collegechoiceplan.com/ and read Information Bulletin #98 for details.
Make a donation to higher education – With this one, you may get a state credit and a deduction on your federal tax return. If you are in the giving mood and want to support the Indiana college of your choice, making a contribution could net you up to a $100 (if filing singly) or $200 (if married filing jointly) credit when you file your state tax return. Contributions to your favorite Indiana college can include not only cash, but stuff – like a rare book, a painting or even a piece of land. Plus, you get an even bigger bang for your college-contribution buck if you itemize deductions on your federal tax return. Just make sure to keep your receipt/letter from the institution. Read Information Bulletin #14 for particulars about the state credit, and get information about claiming itemized deductions from the IRS.
Contribute to K-12 scholarships – Contributions to this fund are used to provide K-12 scholarships for Hoosier children. A contribution can net a 50% credit against your state tax liability. While there are no limits on the size of qualifying contribution, the entire tax credit program has a limit of $7.5 million in credits per state fiscal year. And, this contribution may also qualify as an itemized deduction on your federal tax return. For more information about this credit, visit the Dept. of Education’s School Scholarship site at www.doe.in.gov/improvement/school-choice/school-scholarships.
Private school/homeschool deduction – You may be eligible for a deduction based on education expenditures paid for each of your dependent children who are enrolled in a K-12 private school or is homeschooled. If eligible, the deduction is $1,000 per qualified dependent. For more information, get Information Bulletin #107 at www.in.gov/dor/3650.htm
For those of you looking for state income tax deals, consider these ideas. Contributions/payments made between now and Dec. 31 will qualify you for these credits/deduction when filing your 2013 Indiana individual income tax return.
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