Maxine Aaronson, Attorney at Law
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Tax Newsletter

  • Entertainment and Meals: The 50% Rule and Exceptions
    In most cases, you can deduct no more than 50% of certain unreimbursed business-related meals and entertainment expenses on your income tax return. This limit applies to employees or their employers, and to the... Read more.
  • Deducting Expenses for Volunteer Services
    You may be able to deduct certain expenses that are related to volunteer services offered to a qualified charitable organization. However, these services should not have been reimbursed or used for personal... Read more.
  • Can You Deduct Expenses Related to Gifts?
    If you give business gifts either directly or indirectly to clients or potential clients, you may be able to deduct some or all of the cost of the gifts. Business gifts that may typically be characterized as entertainment... Read more.
  • "Excess Alimony" Tax Rules for Divorce Payments
    Most divorces involve a division of property between the spouses. If there are children from the marriage, the parent not granted custody usually must pay monthly child support. In addition, one of the spouses may be granted monthly... Read more.
Tax News Links

College Expenses May be Deductible

You may be able to receive tax benefits if you are saving or paying for expenses related to a higher education, either for yourself or for a family member. There are a number of tax benefits that you may be entitled to.

Educational Tax Credits

The American Opportunity Credit (Hope Credit) and the Lifetime Learning Credit apply to tuition and enrollment fee expenses. Only one of these can be applied per qualified student per year. Different rules apply to each separate tax credit. However, neither credit can be used by households with incomes of $62,000 or more or for households of combined incomes of $124,000 or more (joint returns).

Individual Retirement Accounts (IRAs)

The education IRA and traditional IRA may be applied to tuition expenses, as well as expenses related to books, supplies, and room and board. Withdrawals from an education IRA account are tax-free, with limitations.

Student Loan Interest Tax Deductions

Interest paid on student loans may be deductible. This only applies to the first 60 months of loan interest. The loans must also be used for at least half-time in a degree program.

Qualified State Tuition Programs

Under these programs, future tuition expenses are prepaid, and earnings are not taxed until they are withdrawn.

U. S. Savings Bonds

The interest earned is excludable from income. However, this only applies to specific qualified bonds.

Employer’s Educational Assistance Programs

Like savings bonds, employer benefits are excludable from income, with a $5,250 annual limit.

As some higher education benefits will not allow you to claim two educational benefits simultaneously, those taxpayers interested in taking advantage of higher education tax benefits should investigate the specific terms of the relevant benefit programs.