Sallie Mae: Don't forget to claim college tax credits and deductions

NEWARK, Del.--(BUSINESS WIRE)--

The federal tax return filing deadline is only a month away. Don't forget to claim the tax benefits of college, says Sallie Mae, the nation's No. 1 financial services company specializing in education. Taxpayers who paid college tuition or interest on student loans in 2013 may be eligible for a tax break.

A national study conducted by Sallie Mae and Ipsos found that 41 percent of parents of college students and college students filed education tax credits or student loan interest tax deductions.

“It is worth it to learn what tax breaks for education expenses are available and how you can qualify,” said Nikki Lavoie, spokeswoman for Sallie Mae. “Filing for education tax credits and student interest tax deductions is one way to make college more affordable.”

Sallie Mae recommends taxpayers in college, taking a course, or paying interest on a student loan investigate whether they are eligible to claim one of the following credits or deductions:

The American Opportunity Tax Credit is a per-student, partially refundable tax credit. It was set to expire at the end of 2012, but it was extended through 2017. For tax year 2013, students can claim a tax credit of up to $2,500 for expenses on tuition, fees and educational materials in the first four years of post-secondary education. To receive the maximum credit amount, a taxpayer must have modified adjusted gross income of less than $80,000, or $160,000 for joint filers. Again this year, low-income families who owe no tax may be eligible to receive a credit refund of up to $1,000 for each qualifying student.

The Lifetime Learning Credit is a per-taxpayer, non-refundable credit of up to $2,000 that applies only to expenses for tuition and fees. Students in undergraduate or graduate programs or any continuing education program may be eligible. The credit may be claimed for any year in which qualified tuition and fees are paid. To receive the maximum credit amount, a taxpayer must have modified adjusted gross income in 2013 of less than $53,000 and $107,000 for joint filers.

The Student Loan Interest Deduction is an “above-the-line” deduction of up to $2,500 for interest paid on qualified federal or private higher education loans. To receive the maximum deduction, joint filers must have modified adjusted gross income of less than $125,000 and $60,000 for single taxpayers.

Refer to the IRS Form 1098-E to determine the amount of student loan interest paid on one or more qualified higher education loans during the year. Sallie Mae customers may log in to SallieMae.com to securely download their Form 1098-E from their online account.

The Tuition and Fees Deduction is an “above-the-line” deduction of up to $4,000 for qualified tuition expenses and related fees paid in 2013. In order to receive the maximum deduction, a taxpayer must have modified adjusted gross income of less than $65,000 or $130,000 for joint filers. Taxpayers may refer to the IRS Form 1098-T provided by their school to help them determine the amount of qualified tuition and related fees they paid during the year.

Taxpayers can even save money for college as they file. Members of Upromise by Sallie Mae, a free-to-join program that helps students and families save money for education expenses, can earn 10 percent cash back on all TurboTax software and service charges incurred in conjunction with the preparation and filing their taxes. They should first log into their account on Upromise.com, and then using the dedicated TurboTax link.

New this year, TurboTax Online will feature a banner to let users know they have options for repaying federal student loans. The banner will link to the U.S. Department of Education, where users will be able to determine if they could lower their monthly student loan payments through an income-driven repayment plan.

Sallie Mae reminds taxpayers to be aware of tax refund scams. Examples include Internet solicitations asking for Social Security numbers, fake flyers claiming refunds are given without eligibility, and claims for refunds or rebates based on fake statements. The IRS offers tips to help you avoid becoming a victim of these scams.

Consult IRS Publication 970, Tax Benefits for Education, or your personal tax adviser to learn which education-related tax benefits you are eligible to receive for 2013.

Join the conversation on how to save, plan and pay for college at Facebook.com/SallieMae.

Sallie Mae SLM is the nation's No. 1 financial services company specializing in education. Whether college is a long way off or just around the corner, Sallie Mae turns education dreams into reality for American families, today serving more than 25 million customers. With products and services that include Upromise rewards, scholarship search and planning tools, education loans, insurance, and online banking, Sallie Mae offers solutions that help families save, plan, and pay for college. Sallie Mae also provides financial services to hundreds of college campuses as well as to federal and state governments. Learn more at SallieMae.com. Commonly known as Sallie Mae, SLM Corporation and its subsidiaries are not sponsored by or agencies of the United States of America.