Daily Aid 111: How to increase your education tax refund

Student Financial Aid News

From NASFAA and the Seattle PI:

“In the wake of the governor’s proposal to raise college tuition by 30 percent over two years, University of Washington students and administrators are trying to find ways to blunt the financial impact on families,” Seattle Post-Intelligencer reports. “One possible solution is federal money. The economic stimulus plan President Obama signed in February expanded tax credits to low- and middle-class families who are paying for higher education. ‘That’s the magical one,’ UW spokesman Norman Arkans said. ‘Whoever decided to improve that is a genius.’ For families with an annual income of less than $160,000, the federal government now offers a tax credit of $700 to $2,500 for four years. That’s up from the Hope Credit’s maximum $1,800 and an eligibility period of two years. Plus, the income ceiling increased from $116,000. ‘It’s the middle-income families that everyone’s worried about,’ Arkans said. ‘And the tax credit’s going to help them.’”

Commentary

Very good news indeed. Make sure that when you prepare your taxes, if you haven’t already done so, you take advantage of the new tax credit. If you filed early, consult a tax preparation advisor or CPA about filing a corrected/amended IRS 1040 to qualify for additional refunds. Your financial advisor should be able to counsel you on how to correctly amend your tax return for tax year 2008.

Disclaimer: I am not a tax professional. As with any advice regarding taxes and other personal finance issues, please consult a qualified professional before making any extensive changes to your finances, and don’t believe everything you read on the Internet.

The Financial Aid Podcast recommends TurboTax as a paid affiliate.

Scholarship Update

Pfizer Animal Health Scholarship. The AABP Foundation announces the availability of scholarships for 2009. These scholarships will be administered by the AABP Foundation with the assistance of the Amstutz Scholarship Committee. Announcement of the scholarship recipients will be made prior to the AABP Conference. Scholarship recipients will be encouraged (and funded) to attend the AABP Annual Conference in Omaha this September to receive their awards in person but attendance is not required to receive the scholarship.

Details at our free college scholarship search site.

Mail Bag

Ed asks via Twitter:

My oldest is a hs junior. I’m coming to you later (and likely going to affiliate). Spread thin as a disabled single dad of 3. When do I have to get deeply serious re; financial aid, etc? Thank you Chris

Now, right now. Your oldest should be hunting down scholarships right now, today, and throughout the next two years. Keep the grades up, get involved in activities and things that he or she is passionate about, and be hunting for scholarships. Make it a rule in your house to locate and apply for a scholarship every Sunday from now until high school graduation. Offer an incentive, like we mention in our Scholarship Search Secrets eBook, of a percentage of each scholarship earned as spending money.

You’ll want to talk to a financial planner as well about how to start structuring your finances today so that you have one full tax year for changes to take effect.

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