It’s that time again – school is back in session! As students prepare to return to classrooms and universities across the state, don’t forget that Indiana offers several education related credits and deductions. Check out these ways to maximize the money you’re already spending on education.
Save for college – The College Choice 529 Savings Plan can earn you a 20 percent credit (up to $1,000) for contributions made this year. To contribute to an education savings plan you do not need to be a family member. Read the FAQ page on the Indiana Education Savings Authority website for more information.
Donate to higher education – Be sure to keep your receipt/letter from the institution and this donation may get you a state credit and deduction on your federal tax return. Making a contribution to support your Indiana college of choice could net you up to a $100 (if filed singly) or $200 (if filed jointly) credit when you file your state tax return. You’ll get a bigger bang for your buck if you itemize deductions on your federal tax return. More state credit details for this donation can be found in Information Bulletin #14.
Contribute to K-12 scholarships – When you contribute to a qualified scholarship granting organization, the funds are used to provide scholarships for Hoosier children in grades K-12. A contribution can net a 50 percent credit against your state tax liability. While there are no limits on the size of qualifying contribution, the entire tax credit program has a limit of $7.5 million in credits per state fiscal year. This contribution also may qualify as an itemized deduction on your federal tax return. Visit the Department of Education’s school scholarship site for more information.
Donate to K-12 education – You can get a tax refund check-off by donating some, or all, of your state refund to the Public K-12 Education Fund.
Qualify for an Education Expense Deduction – If you have a dependent child enrolled in K-12 private school or who is home-schooled, you may qualify for a deduction based on education expenditures for that child. Expenditures include tuition, fees, textbooks, and school supplies. If you are eligible, this deduction is $1,000 per qualified dependent. Details can be found in Information Bulletin #107.
Qualify for the Public School Educator Expense Credit – Eligible educators working for an Indiana school corporation are entitled to a credit for qualified expenses paid for certain classroom supplies. This credit can be as much as $100 or $200 if you are married and both spouses meet the requirements.
In order to take advantage of these credits/deductions on your 2016 Indiana individual income tax return, be sure to make your contributions and payments by Dec. 31, 2016. Your donation/contribution can help you and students throughout Indiana!
Contact your Somerset CPAs, P.C. advisor to learn more.