Make school shopping less taxing
Hitting the sales and relying on hand-me-down clothes are some options for pinching pennies when it comes to back-to-school shopping. But there's another place to save money some people might overlook — your income taxes.
"It is something that is probably missed out there by a lot of people," said Steve Salveson, CPA with Smith Schafer and Associates in Red Wing.
Parents with children in kindergarten through 12th grade have options on state income tax returns for children's education expenses: a refundable education credit and the education subtraction.
The Minnesota Department of Revenue notes that the programs help offset costs for required materials or educational services, such as textbooks, paper, pens and pencils, calculators and notebooks. Also covered is the rental or purchase of educational equipment such as musical instruments or computer hardware and software and services such as tutoring and educational camps.
"The list of required school supplies continues to grow each year," state revenue Commissioner Myron Frans said. "These supplies are a necessary part of school and saving your receipts now will save you money later."
While it might not be a lot of money saved and there are caps, Salveson said it's worth it to try.
"We always end up buying supplies for our kids," he said. "The schools have less and less to work with. ... It all adds up."
Most of the qualifying expenses are the same for the credit and subtraction. But some — like tuition — are only available under the subtraction.
"That helps out for a lot of people that send their kids to private schools," Salveson said.
There are no income limits to qualify for the education subtraction.
The education credit has income limits based on the number of kids, starting at $37,500 for one to two children and going up $2,000 for every child after that.
Taxpayers who are not required to file an income tax return still can claim a refund for the education credit, the state officials said.
Parents should save the receipts for the school supplies or services purchased until it's time to file 2013 income taxes.
Envelopes for school supply receipts are even available at the Department of Revenue's booth in the Education Building at the Minnesota State Fair.
For more information on the education tax programs, visit the department's website or talk with an accountant. The K-12 education subtraction and credit information is available at http://www.revenue.state.mn.us/individuals/individ_income/Pages/K-12_Edu...