Save on Taxes THIS Year by Going to School NEXT Year.

If you enroll in school--and it may not be too late to enroll in a community college or apply for re-enrollment in a university you have already attended--you can save on THIS year's taxes.  Do so by paying for the courses this year and attending the courses that start within the first three months of next year.

You will get a TAX CREDIT--better than a mere deduction.  You will also sharpen your mind, add something to your resume, make yourself more competive in a tight job market, and support higher education. .
NOTE: In this post, I am borrowing heavily from the IRS web page on deductions for educational expenses.

Link to IRS page on educational deductions

For war tax resisters, tax credits are even better than tax deductions because deductions are subtracted from your gross income while tax credits are subtracted from your actual tax bill.

The logic of this is that war tax resisters should get themselves to a university. The advantages of doing so are legion--and for regular readers of this blog, I apologize for the repetition:

• A lovely, $2,000 tax credit if you take advantage of the Lifetime Learning Credit. The only real requirements are that your adjusted gross income must be under $60,000 if filing singly and $120,000 if filing jointly. You can claim this credit for for an unlimited number of years.  That is why it is called a lifetime learning credit. 
• The amount of the credit is for the amount of tuition paid that year up to a maximum of $2,000.
• Being a registered university student makes you eligible for free or reduced price services including:

1. Low-cost medical insurance
2. Low-cost or free medical care at university clinics
3. Use of the school gym.  If you like to work out, taking one course per term will practically pay for itself.
4. Use of a wonderul library and free access to a wide variety of peer-reviewed journals with the newest research on important topics.
5. A broader social life. Students are some of the most interesting people in the world because they are interested in a wide variety of issues.
6. A chance to do political organizing among a large population of young people. Universities are particularly good places to do counter-recruitment, war tax resistance, and organizing for demonstrations.
7. Free or reduced-cost access to plays, concerts, museum exhibits, and other cultural activities.

Here are the details of the American Opportunity Credit and Lifetime Learning Credit taken straight from the IRS website:



Caution. You can claim both the American opportunity credit and the lifetime learning credit on the same return—but not for the same student.


American Opportunity Credit: (Note that if you qualify, this credit is  a better deal but qualifying is more difficult:

• Up to $2,500 credit per eligible student
• Persons claiming deduction may earn up to $180,000 (modified adjusted gross income) if filing jointly or $90,00 if single. 
• 40% of any credit may be refundable.  In other words, if your taxes are less than $2500, you may get the difference back as a refund.
• Available ONLY for the first four years of higher education. If you need more education than four years--and even high school teachers have to take courses to update their licenses--this credit will not work.
• Credit available only for four tax years.
• Students MUST be pursuing an undergraduate degree or other recognized certification.
• Students must be enrolled at least half-time for one academic period during the tax year.
• No felony drg convictions.
• Covers tuition and required enrollment fees.  Books and other supplies do not need to be purchased from the institution.
• Deduction available for payments made in 2010 for courses beginning in the first three months of 2011.

Lifetime Learning Credit

• Up to $2000 credit per return.  If more than one person claimed as a dependent on the return is pursuing higher education, you may want to see if you qualify for the American Opportunity Credit, which offers $2500 per eligible student.
• Modified Adjusted Gross Income has a maximum of $120,000 for joint returns and $60,000 for singles. Note that the MAGI for singles for the Lifetime Learning Credit is lower than that for the American Opportunity Credit.
• Credit limited to the amount of tax you owe.  You do NOT get a refund if your tuition costs exceed the amount you owe in taxes. This differs from the American Opportunity Credit.
• Available for an unlimited number of years for those pursuing post-secondary education or those taking courses to improve job skills.
• Student need not be pursuing a recognized educational credential.  This makes the credit perfect for teacher maintaining their licenses or for those whose professions require continuing education credits.
• Available for one or more courses.  No requirement for full- or half-time studies.
• Felony drug convictions do not disqualify you.
• Covers tuition and required enrollment fees.  However, if you want to deduct books and other supplies, those costs must be paid to te institution itself and not to a private business.

Which credit you apply for depends on what educational program you are taking, what your educational background is, how many people listed on your tax return are going to school, and your legal history.  However, these two credits have one thing in common.  You can lower this year\s taxes by enrolling and paying this year, even if you go to school early next year.  Pay yourself and not the war machine by going back to school.