January 28, 2022 marked my one year anniversary of paying off my student loans . Reflecting back on choosing to pay off my student loans leaves me with several take a ways that I want to share with you! In September 2020 I decided to become debt free by utilizing the debt snowball method to pay off all my debt. Before this I had struggled to save and really understand basic financial principles. As a first-generation college student, I received a scholarship to attend undergrad for free, but the scholarship did not cover summers. During the summers I took out student loans to cover costs without paying interest rates or how much I was taking out. By the end of undergrad I had amassed a little under $17K. Fast forward to graduate school I received another scholarship that covered my education. At the time I was a teacher in a new very expensive city and I had missed the cutoff to have my paycheck last me throughout the summer. So, I decided to take out a loan for two summers to keep
(This
a photo of a mock 1098-T Tax Form used as a thumbnail for my YouTube video
on Tax Tips for Students (1098-T.)
It’s tax time! By January 31, 2021, your W2 will be sent to
you so that you can file your taxes. Of course, there are many tax deductions however,
it is up to you to figure out which ones may be best. If you are a student, you
should be receiving your 1098-T any day now to assist you in securing one of
two tax breaks. In case you were wondering, a 1098-T is a form that reports how
much you or your parents paid for tuition or other expenses.
You will only receive this form if you have paid at least
$600 in expenses toward your education without including scholarships or any
other assistance that did not come out of pocket. Your educational institution
will provide this form to you by January 31, 2021. It is usually available in
the section where you can make your tuition payments on your school’s website.
That’s where I was able to find mine.
Once you have printed off your form and are ready to file your
taxes your 1098-T form will assist you in obtaining one of two tax credits. The
American Opportunity Tax Credit is for students in their first four years of
college and is worth up to $2,500. The Lifetime Learning Credit is for students
who are not in their first four years and you can claim up to 20% of $10,000 or
$2,000. Remember, you cannot claim both! For more information on your 1098-T
check out the video below.
SUBSCRIBE: Tax Tips for Students (1098-T)
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