The buzz of back-to-school season isn’t just about new backpacks and never-ending drop-offs—it’s also the perfect cue to sharpen your tax game. While the kids are busy learning the Pythagorean theorem (again), you can school yourself in tax strategies that put more money where you want it: your family’s future.
Education Tax Credits: Score Extra Credit (for Your Wallet!)
Why let the kids have all the fun with credits? The American Opportunity Tax Credit lets you claim up to $2,500 per eligible student, with 40% potentially refundable even if you don’t owe any tax. The Lifetime Learning Credit nabs you up to $2,000 per return (sorry, not refundable, but every bit helps). Pro tip: hang onto those Form 1098-Ts and all those receipts for books and supplies—think of them as golden tickets for your next tax filing adventure.
Child and Dependent Care Credit: Because After-School Isn’t Free
If your afternoons look like a logistical relay race—day camps, after-school programs, or that saintly nanny—pause and check if you qualify for the Child and Dependent Care Credit. This often-overlooked benefit can take the sting out of childcare costs for kids under 13. That’s one less permission slip to worry about!
529 College Savings Plans: A Little Now, A Lot Later
Thinking ahead to college? A 529 College Savings Plan is your backstage pass to tax-free growth and withdrawals for qualified education expenses. Even if classes have started, it’s not too late to contribute. Many states sweeten the pot with deductions or credits for your contributions, so it’s a win-win whether your child is studying algebra or anthropology.
Educator Expense Deduction: Apples Aren’t the Only Perk
Educators—step right up! If you or your spouse are teachers, you can deduct up to $300 each ($600 for joint filers). Supplies, books, and even professional development may all count. It’s a small but worthy thank you for going the extra mile—and you don’t have to itemize to claim it.
Back-to-school doesn’t have to be all about forms, fees, and forgotten lunchboxes. With a bit of planning, you can turn this hectic season into a financial win. Remember: track those receipts and consult a tax pro if you have questions (because while the IRS might love a good story, it prefers documentation).
Curious how these strategies fit your bigger financial picture? This is the perfect moment to touch base with a trusted financial advisor. With expert guidance tailored to your family’s goals, you’ll head into the school year as prepared for financial success as your kids are with freshly sharpened… iPad pencils?
Don’t procrastinate,
Chandler