As we all prepare for a new and interesting school year, here are some simple actions you can take to ensure you are maximizing savings opportunities on your 2020 tax return.
Hold on to your receipts! The CARES Act has provided several provisions to how taxes have been handled in 2020. We encourage all families to hold on to any receipts from child care facilities, after-school care, and summer camps to provide to your tax preparer when you file next year. As updates evolve, our team will be monitoring for opportunities when we prepare your taxes next year.
College Tuition Payments
If you already have a tax-deferred account in place (such as an Educational Savings Account), you can use it to pay for qualified educational expenses such as books and computers for elementary, high school, and colleges.
Lifetime Learning Credits
If you have been working from home and signing up for courses at educational institutions to sharpen your career skills, you may be eligible for lifetime learning credits if you paid out of pocket. Lifetime Learning credits (up to $2,000) cover qualified educational expenses. There is currently no limit on the number of years the taxpayer can claim the credit. If you have questions, discuss this with our team to ensure you are eligible for the credit.
Do you have children that worked a summer job or plan on working throughout the school year? If so, talk to your financial advisor about getting them set up with a Roth IRA. The income earned from summer and/or after school employment by students can be contributed to a Roth IRA that will grow tax-free. Talk to a trusted advisor who can tell you more about how this works and answer any questions.
We consult with individuals, families, and businesses year-round. Schedule a free consultation with our team today.