Tax tips for students

Income tax season is approaching, and students may want to consider these tips from the Kentucky Higher Education Assistance Authority (KHEAA) to help the tax preparation process go more smoothly.

“One of my top priorities as governor is making higher education more accessible to everyone on Team Kentucky. Students and families paying for technical education or college after high school should take advantage of credits and deductions that can lower their tax burden,” Gov. Andy Beshear said. “Those credits and deductions are another way the state and federal governments help make education more affordable for Kentuckians, which is more important than ever during a year where so many families have suffered financially.”

Before students file their tax return, they should discuss the situation with their parents who may be able to claim the student as a dependent, which could save them thousands of dollars.

Students and parents may be able to take advantage of these programs on their federal taxes:

American Opportunity Credit, available for the first four years of college.

Lifetime Learning Credit, available if a taxpayer or a dependent is taking college courses to acquire or improve job skills.

Tuition and fees deduction, which lets taxpayers deduct qualified education expenses paid during the year for themselves or a dependent. These expenses must be for college.

Student loan interest deduction, which lets people deduct up to $2,500 per year on federal taxes for interest paid on federal student loans.

For more detailed information about federal programs, go to irs.gov to download the free Publication 970 Tax Benefits for Education.

Kentucky also offers a tuition tax credit for undergraduate students who attend state colleges.

Tax rules may change from year to year, so make sure you have the most up-to-date information before filing a return.

KHEAA is the agency that administers the state’s grant and scholarship programs, including the Kentucky Educational Excellence Scholarship (KEES). The agency also provides financial literacy videos at itsmoney.kheaa.com and free copies of “It’s Money, Baby,” a guide to financial literacy, to Kentucky schools and residents upon request at publications@kheaa.com.

Many of KHEAA’s student aid programs are funded by Kentucky Lottery receipts.

For more information about Kentucky scholarships and grants, visit kheaa.com; write to KHEAA, P.O. Box 798, Frankfort, KY 40602; or call 800-928-8926, ext. 6-7214.