Hope Scholarship Education Tax Credit for 2011, 2012

The Hope Education Tax Credit is also referred to as the American opportunity tax credit. You’re probably wondering how much money you can make and still claim the tax credit. As always it depends on your filing status and your income level. The Hope Scholarship Education Tax Credit for 2010 increases to $2,500 per student.

The credit is gradually reduced if your modified adjusted gross income is between $80,000 and $90,000 ($160,000 and $180,000 filing a joint return). Now there are always exceptions to the rule and it’s no different when it comes to the Hope Scholarship Education Tax Credit.

EXCEPTIONS

If you live in one of the Midwestern disaster areas then, the amounts change. Check with the IRS to see the list for the states involved and your particular county. There are also changes concerning the number of years the Hope credit can be claimed.

EXPANDED EXPENSES

Qualified tuition and related expenses have been expanded to include expenditures for course materials. Course materials means books, supplies, and course materials needed to take the class. For example if you’re in art class and you need paint, brushes, sketch books and so on. It doesn’t matter where you purchase the items from either. You can save yourself some money by purchasing them on sale at a big box store. You do not have to purchase the course related materials from the educational institution.

There’s a difference between a deduction and a credit. A deduction reduces the amount of income subject to tax. A tax credit reduces the amount of income tax you have to pay. If you have to pay $800.00 in tax and you’re credit is for $1,000, you will not receive a refund of the difference. It doesn’t work that way.

If you have any questions and would like to read more about the Hope scholarship education tax credit then, visit the tax experts at TurboTax Online. Save yourself a lot of time and energy by getting your questions answered in live time. You can answer via email, phone, or live chat. Visit the website today! You’ll be glad you did.