Tax Breaks for Higher Education

Tax Break for Higher Education

Paying for college or any kind of post-secondary education can be expensive. Fortunately, our income tax system has credit, deductions, and other tax breaks for higher education. Check out this resource to see if you’re qualified for any of these tax breaks.

What are common tax mistakes made by college students?

One of the most common mistakes made by college students is that they think they are not required to file their income taxes–some students don’t even know if they have to file or not. The answer to this question is based on the word “income.” The student has to ask him or herself if they have earned any income. If the student is a single dependent and the total earned income for the year was less than $6,100, the student is not required to file their taxes. That doesn’t mean the student shouldn’t file; it just means they don’t have to. The reason why the student should probably file, even if their income falls under $6,100, is because they may get back all or some of the money that was withheld (IRS.gov covers this in more detail). If the student does file, it’s important to avoid mistakes. Mistakes slow down refunds and draw attention to you with the IRS.

Another common mistake is claiming the wrong dependent status. If the student’s parents are already claiming him/her as a dependent then the student should not make the mistake of claiming themselves as a dependent.

Also, many students miss out on education deductions. Whoever pays the student’s tuition (including themselves) can claim certain education-related deductions including those for tuition and fees.

Lastly, some students fail to account for dual state income. If you live in one state, attend school in another, and work in both, you will have to account for the income (and taxes paid) from both states. For example, a student may live in Wisconsin but attend college at the University of Illinois at Urbana-Champaign. Since she is a resident of Wisconsin, she will have to claim all of her income there, including the income from Illinois. However, she will get a credit for taxes paid on income in Illinois.

Written by Cindy Garcia, Financial Wellness Peer Educator, University of Illinois Extension

Why should I negotiate?

One of the hardest parts of being on the job market is negotiating for yourself once you have an offer. The expectation is to feel grateful no matter what compensation you are offered, but the truth of the circumstances is that this feeling only helps the employer. While negotiating can be terrifying for some people, the importance in negotiating effectively rests in what is to be gained, or lost. There is a lot at stake!

Employers expect negotiation as part of the hiring process. Your ability to communicate thoughtfully and collaboratively in the negotiation demonstrates that you will be able to take this approach with your colleagues and clients. Negotiating can also be seen as a respectable and admirable quality when done correctly.

The primary point for most people is the value of their monetary compensation. Salary negotiation has both immediate and long-term benefits. Consider that a two to four percent increase in your initial salary can translate to over one million dollars of earnings over your lifetime. That amount could send your child to Harvard four times over. While the amount may not seem like much at first, remember that subsequent raises will be based off your current salary, and if you decide to leave your job, you can gain leverage on your next salary as well.

While salary is important, you must also consider the entire package within the offer. Does it give you financial support for continuing education, insurance, paid time off, gym memberships, childcare, travel stipends, moving expenses, and help locating housing? These additional benefits can dramatically increase the value of your job offer, and must be assessed correctly when estimating your total compensation. Just remember this: You have more leverage at the time of the offer than at any other point in the job search. Take this opportunity to ask for the things that will make you a productive, satisfied employee. If you don’t, you may really lose out in the end.

Written by Kyle Carmack, Graduate College Career Development Office

How can I find employment on campus?

Looking for Jobs on Campus

There are a number of campus job boards available to students looking for employment on campus. Don’t assume that positions only open before the start of the semester – check back for new postings throughout the year.

  • Student Financial Aid Virtual Job Board: This job board is intended to assist University of Illinois students in finding part time employment to help them in meeting their needs while pursuing an education at this University.
  • Assistantship Clearinghouse, Graduate College: The Graduate College Assistantship Clearinghouse lists assistantships that are available to graduate students on the Urbana campus.
  • Research Park Job Board: Employers at the Research park are looking for undergraduate and graduate students to hold internships and part-time employment during the summer and academic year.

Also, reach out to professors and advisors who may have paid research or teaching opportunities. Creativity and initiative can reveal opportunities that you may not have considered!
Continue reading