Looking for more financial information? Check out GradSense.org, an engaging and comprehensive resource developed as a collaboration between the Council of Graduate Schools and TIAA-CREF.
In addition to highlighting trends and developments in topics related to student finances, such as student debt and taxation issues, GradSense features a host of useful tools and infographics. Use these resources to understand what your degree may be worth, how long it may take to repay your student loan, or what salaries you can expect to earn from different careers.
GradSense recently underwent a facelift, so you’ll easily find relevant articles and links highlighted on the homepage. You’ll also find resources from their university partners on the homepage, which includes the University of Illinois.
Take some time to explore GradSense and see what it has to offer!
Written by Laura Spradlin, Graduate College
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.
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
Have a financial question? Ask us!
Use the “Ask a Question” form on the right side of the Cultivating Currency homepage to submit your own frequently asked money questions. Enter your name, email address, question or comment, and click send. Look for an answer from one of our financial experts–you might even see it answered on the blog!
Undergraduate and graduate students that borrow Federal Direct Student Loans (subsidized and/or unsubsidized) need to be aware there are maximum allowable loan limits. There is an annual maximum loan limit which restricts the total amount a student can borrow for an academic year (fall, spring, and summer). Also, there are aggregate maximum loan limits which restrict the amount a student can borrow over their college career.
Written by Josh Keen, Office of Student Financial Aid