Monday, June 6th, 2011
Yesterday, my son graduated from high school. His class selected a math/environmental sciences teacher named Nicole Brite to deliver the faculty address to the senior class. Ms. Brite delivered a spectacular address which was meaningful, witty and thoughtful (and she received a well deserved standing ovation from both the students and the audience).
In one part of her speech, Ms. Brite turned to the graduates and said "now I am going to offer you some words of advice that I wish someone had said to me when I was leaving high school." One of the points she made I think is applicable to everyone, not just high school students.
"Stay away from credit cards," said Ms. Brite. "When you get to college, you will see tents set up by the credit card companies. They will offer you frisbees and t-shirts and free food to entice you to sign up for a credit card. They'll tell you that a credit card will help you build up your credit and you can use it only for emergencies. Don't believe it. You will be tempted to decide that an emergency takes the form of a pizza at 2 in the morning, or putting your entire fraternity's dinner on your card because no one has cash. Credit cards will mess you up."
I hope that each and every one of the graduates in my son's class heard these words of wisdom and I wish this advice could be included in the "welcome to school" packets given to incoming freshman.
Over the years I see dozens of young adults in their late 20's and early 30's who are still dealing with thousands of dollars of college years credit card debt and the associated damaged credit ratings. It is so easy to find oneself behind the proverbial eight ball, and digging out from a credit hole is a lot more difficult than avoiding the problem in the first place.
If your son or daughter recently graduated from high school, congratulations on an accomplishment and a milestone. Let your graduate know that while college isn't exactly the real world, they now have assumed the capacity to get themselves in adult level financial trouble. As uninteresting as household budgeting ten years hence may seem, they most definitely do not want their college aged mistakes to lead them to a bankruptcy lawyer's office in the future.
Posted in Advice, Consumer Protection, General consumer bankruptcy info, Georgia Bankruptcy, a, address, aged, and, applicable, brite, class, class , college, credit cards for college students, dangers of credit cards, delivered, financial advice for high school graduates, graduated, graduates, high, leaving, math environmental, mistakes, ms, named, nicole, said , school, sciences, selected, senior, spectacular, students, teacher, the, wisdom, words, years | Comments Off
Thursday, January 28th, 2010
With tax season coming up, everyone is looking for new ways to save, either to get a larger refund or to afford paying taxes owed. Thanks to a new ruling, some graduate students may find extra breathing room come tax time.
The Wall Street Journal reports that, thanks to the persistence of Lori Singleton-Clarke, a Maryland woman, students pursuing a Masters in Business Administration degrees (MBAs) may now find their tuition is tax deductible.
Several aspects of the case could be important to MBA students and others looking to save money this tax season.
- Know the code. The Internal Revenue Service’s tax code is complex and detailed, so knowing where to look for potential deductions can help. Tax deductions for education can be found in IRS Publication 970 (see below).
- Ask for help. If you aren’t tax-savvy yourself, you may want to enlist the help of a professional tax-preparer or commit to learning how to work at-home tax software like TurboTax.
- Stay organized. The WSJ reports that Singleton-Clarke’s case was successful in part because she kept all her paperwork organized and was able to provide adequate documentation for her claim.
- Be persistent. Singleton-Clarke’s case was not always easy, sources note. But she stuck it out and ended up saving herself some serious money – and potentially paving the way for other graduate students to do the same.
Does Your Education Qualify?
Educational expenses eligible to be considered tax-deductible must meet certain specific criteria, including the following.
- Income limits for single and married individuals affect how much tuition can be deducted.
- Parents may deduct certain expenses for children whose education they fund, but only if the parents claim the children as dependents.
- Certain institutional fees (like health care and books) are not considered part of tuition and so are not eligible for the tax deduction.
- Even a single college- or graduate-level class could qualify you for the tax deduction.
A more detailed review of these regulations is available here, or you can browse this year’s version of Publication 970 (below, as a PDF).
Other Tax Concerns
Whether or not you pursued further education this year, stay alert during tax season. Certain predatory loans in disguise tend to crop around this time of year, including RALs (refund anticipation loans) and RACs (refund anticipation checks).
If you do wind up owing taxes that you can't afford to pay, you can file an extension and possibly work with the IRS to pay your taxes over time. Paying taxes owed is important since they typically cannot be discharged in bankruptcy.
Remember to keep your sensitive information (like bank account numbers and Social Security Number) private!
Additional Resources
IRS Publication 970 (2010)
Posted in Legal Info, Taxes, students, tax deductions, tuition | Comments Off
