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OK, here's the deal: I'm 19 and living under my parents' roof (yay, semi-free ride), and also attend college full-time, and have a part-time job. We've already figured out I can't take my own deduction, that belongs to my parents (even if they don't claim it, I couldn't either, right?). What I want to know is:

1- Can I claim any deductions, such as the various deductions available to college students?

2- Are there any other brilliant methods for reducing my tax bill available to me?


***Wes, I doubt you will find that your deductions exceed your standard deduction. Generally, there are no special benefits available to college students, especially when it comes to post secondary education, for those who are just starting out.

You may put up to $2,000 in a deductible IRA, if you have that much in taxable wages, or other emloyment income. Your taxable income will be reduced by the amount you put in that IRA. If you take this money out before qualfied (generally age 59 & 1/2) you would have to pay tax and, perhaps penalty, on both what you had contributed and whaterver had accumulated in that account.

You might rather opt to put up to $2,000 into a Roth IRA. This would be non-deductible but when you take qualifed distributions (generally, after you turn 59 & 1/2), there is never to be a tax on the contribution or the accumulations in that account. That could be a nice chunk of non-taxable change down the road. This is especially true at your age, if you manage to keep investing through the years.

Your parents may qualify for up to $1500. in refundable credits for your first two years of postsecondary education. This is known as "The
Hope Scholarship Credit".

Hope this helps!=:)

Good Luck,

"Jack"

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