Mar. 14, 2016
College life revolves around three elements: getting an education, finding the cheapest coffee and saving
Taxes may not be everyone’s favorite subject, but there are ways for college students to save money when it comes to educational expenses, including the purchase of textbooks.
Textbooks fall into the category of a qualified education expense which, according to the IRS website, “are amounts paid for tuition, fees and other related expenses for an eligible student.”
This makes books, bought at UCCS or separate retailers, a tax credit which reduces the amount of income tax a student might have to pay.
According to the IRS, “those who can receive educational credits include people who are dependent, an eligible student who must be enrolled at an eligible educational institution, or the eligible student is yourself, your spouse or a dependent you list on your tax return.”
This tax credit is known as the American Opportunity Credit plan which, according to Zacks, a financial advising website, “allows students to deduct the cost of books from their income amount, thus reducing the amount of income the government can tax.”
Shelby Duran, a junior majoring in sociology and women’s and ethnic studies, is familiar with this tax deduction process but only learned about it recently.
She said that the UCCS Bookstore could advertise this to students, but high schools should really be the ones to introduce this information.
“Colleges assume that we know this stuff, but we really don’t. The bookstore could help get the word out to students, but, honestly, this education should take place late in high school when people are just starting to have to pay their own taxes.”
Maggie Williams, a graduate student in the history department, had no clue she could have been deducting her schoolbooks from her taxes.
She said she missed out on a lot of opportunities to save money and thinks the bookstore or the finance office could do a better job in informing students of this possibility.
“If the bookstore made posters or added a short blurb at the end of their receipts saying that students should keep their receipts to save money on taxes, that would be really helpful,” said Williams.
“I easily spent over $700 on books as an undergrad student,” she said. “Now I want to cry.”
Unfortunately for graduate students like Williams, according to Zacks, students can only claim the American Opportunity Credit for the first four years of post-secondary education.
William Frodge, a junior majoring in computer science, thinks the bookstore could do a better job publicizing this information, even if it is something simple like a poster in the store.
“It could really help students. I didn’t know about this and I’m going to go home and do some more research on it. As long as students are at least made aware that this is a thing, it’s up to them to decide if they want to take advantage of it or not,” he said.
School books and supplies can be deducted from your taxes through the American Opportunity Credit plan.
Dependents and qualified students are capable of this tax deduction.
Visit www.irs.gov to learn more.