Sallie Mae Outlines Four Tax Breaks for College Expenses

  Sallie Mae Outlines Four Tax Breaks for College Expenses

Business Wire

NEWARK, Del. -- March 7, 2013

It’s tax season. Students and families who paid college expenses or interest
on student loans in 2012 may be eligible for a tax break. Sallie Mae, the
nation’s no. 1 financial services company specializing in education, outlines
four education-related tax benefits available for tax year 2012.

There are two education-related tax credits, the American Opportunity Tax
Credit and the Lifetime Learning Credit, as well as two deductions, one for
student loan interest and the other for tuition and fees. Certain limitations,
however, are placed on a taxpayer’s ability to claim these credits and
deductions together in the same year.

The American Opportunity Tax Credit is a per-student, partially refundable tax
credit. It was set to expire at the end of 2012, but it was extended through
2017. For tax year 2012, students can claim up to $2,500 for expenses on
tuition, fees and educational materials in the first four years of
post-secondary education. To receive the maximum credit amount, a taxpayer
must have modified adjusted gross income of less than $80,000, or $160,000 for
joint filers. Again this year, low-income families who owe no tax may be
eligible to receive a credit refund of up to $1,000 for each qualifying

The Lifetime Learning Credit is a per-taxpayer, non-refundable credit of up to
$2,000 that applies only to expenses for tuition and fees. Students in
undergraduate or graduate programs or any continuing education program may be
eligible. The credit may be claimed for any year in which qualified tuition
and fees are paid. To receive the maximum credit amount, a taxpayer must have
modified adjusted gross income in 2012 of less than $52,000 and $104,000 for
joint filers.

The Student Loan Interest Deduction is an “above-the-line” deduction of up to
$2,500 for interest paid on qualified federal or private higher education
loans. To receive the maximum deduction, joint filers must have modified
adjusted gross income of less than $125,000 and $60,000 for single taxpayers.

Refer to the IRS Form 1098-E to determine the amount of student loan interest
paid on one or more qualified higher education loans during the year. Sallie
Mae customers may log in to to securely download their Form
1098-E from their online account.

The Tuition and Fees Deduction is an “above-the-line” deduction of up to
$4,000 for qualified tuition expenses and related fees paid in 2012. In order
to receive the maximum deduction, a taxpayer must have modified adjusted gross
income of less than $65,000 or $130,000 for joint filers. Taxpayers may refer
to the IRS Form 1098-T provided by their school to help them determine the
amount of qualified tuition and related fees they paid during the year.

Taxpayers may also take advantage of higher education tax benefits through a
529 college savings plan. 529 plans are tax-advantaged state savings programs
in which the earnings on plan contributions are allowed to grow tax-free and
plan distributions are not taxed to the extent they are used to pay qualified
higher education expenses. Many states offer eligible taxpayers either a
deduction or a credit for contributions made to a 529 plan.

Taxpayers can even save money for college as they file. Upromise by Sallie Mae
members may earn cash back for college when they use H&R Block or TurboTax to
file taxes.

Sallie Mae reminds taxpayers to be aware of tax refund scams. Examples include
Internet solicitations asking for Social Security numbers, fake flyers
claiming refunds are given without eligibility, and claims for refunds or
rebates based on fake statements. The IRS offers tips to help you avoid
becoming a victim of these scams.

To learn more about the education tax credits and deductions described above
visit Please consult IRS Publication 970, Tax
Benefits for Education, or your personal tax adviser to learn which
education-related tax benefits you are eligible to receive for 2012.

Sallie Mae(NASDAQ: SLM) is the nation’s No. 1 financial services company
specializing in education. Celebrating 40 years of making a difference, Sallie
Mae continues to turn education dreams into reality for American families,
today serving 25million customers. With products and services that include
529 college savings plans, Upromise rewards, scholarship search and planning
tools, education loans, insurance, and online banking, Sallie Mae offers
solutions that help families save, plan, and pay for college. Sallie Mae also
provides financial services to hundreds of college campuses as well as to
federal and state governments. Learn more at Commonly known as
Sallie Mae, SLM Corporation and its subsidiaries are not sponsored by or
agencies of the United States of America.


Sallie Mae
Nikki Lavoie, 302-283-4057
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