Tax Tip of the Month: How the American Opportunity Tax credit helps with education costs

In honor of the start of a new school year, for this month's tax tip we share information about how it can help reduce the cost of a college education. The American opportunity tax credit (AOTC) is a credit for qualified education expenses paid for an eligible student for the first four years of higher education. You can get a maximum annual credit of $2,500 per eligible student. If the credit brings the amount of tax you owe to zero, you can have 40 percent of any remaining amount of the credit (up to $1,000) refunded to you. This credit can be claimed either by students themselves, or by their parents if they are dependents. As always, there is some fine print about who qualifies and how the credit can be claimed, which you can review on the IRS website. But fine print aside this is a good benefit that can really help out a lot of people.

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Picture of the Month For the August picture of the month, we have a picture of Ben's office after some recent landscaping work was completed. With all the virtual meetings we've been doing in the past year, some of you may not have seen our office in a while, so we just wanted to show you that we are still here!

Latest Firm News

During the fall months Ben will be finishing up his continuing education requirements as a CPA by attending two conferences--the Virginia Society of CPAs auditing and accounting conference in October, and the Virginia Income Tax Conference in November. If those conferences don't sound very exciting to you, just remember that one of the benefits of using a CPA to assist in your tax preparation is that you don't have to attend conferences like that! Also, this year the Benjamin H Johnson CPA firm will be undergoing its required peer review, which is where another firm comes in and does an audit of our firm to make sure we are following all the proper procedures. It's yet another requirement--in addition to the continuing education requirements--that all CPAs must go through to maintain their certification.

Featured Video: Education Tax Credits The video below from the IRS has more information about some of the tax credits available for people pursuing higher education. The video is from 2018 so it doesn't include credits added since then, but it is still helpful information.

Featured Resource: IRS FAQs about the American Opportunity Tax Credit

Earlier in the newsletter we linked to the IRS page about the American Opportunity Tax credit. They also have a list of FAQs about the credit along with answers, which you can find here.

Featured Customer: Full Circle Schools

Full Circle Schools utilize the natural world to awaken the inner strengths and potential of all stakeholders. We respect and support the individual learning pace of all members. We provide educational activities that nurture the mental, emotional, physical and spiritual aspects of every person. This is modeled from Progressive Education. ​ The day begins with activities like Brain Gym, Yoga, and meditation that prepare the mind for learning and assist with the development of brain and body. Each day involves physical activities such as gardening, outdoor explorations and nature walkabouts that help provide the framework for instruction in English, History, Math, and Science. Our Student Market provides students the opportunity to create real world products and manage the business that markets and sells their products. Proceeds help fund class trips and supplies he students select. These hands-on activities are used to develop and provide individualized instruction that addresses the personal strengths and weaknesses of each student.