Tax Credits for Nurses
If you're a working nurse or a student pursuing an advanced degree in nursing, you may be eligible to claim tax deductions and ultimately lower your tax bill. Plan well, save all required reciepts, take expert advice and file for all eligible claims to retain a maximum deduction from your taxable income.
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Non-Refundable Educational Credits
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You can claim up to a $2,500 credit for qualified education expenses under the American Opportunity Tax Credit program. This credit equals 100 percent of the first $2,000 and 25 percent of the next $2,000 of qualified expenses paid for each eligible student. Also, under the lifetime credit program you can claim 20 percent of qualified expenses paid per student, to a maximum of $10,000, using IRS form 8863. Students enrolled in an eligible higher education institution in a Midwestern disaster area can also apply for the HOPE scholarship tax credit program.
Continuing Education Credits
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The costs of work-related continuing education programs are eligible for deductions. You can claim tax credits for tuition and miscellaneous costs including course fees, books, stationery, Internet connection, telephone calls, and travel and boarding expenses incurred for seminars, conferences and training courses. You can claim up to $4,000 for continuing education expenses and up to $2,500 for student loan interest.
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Work-Related Expense Credits
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Nursing uniforms, nursing shoes, medical gear, tools, equipment or other work-related clothing and supplies required for your nursing job or nursing course and the cost of laundering and maintaining nursing gear are eligible for deductions. Professional membership fees, professional journal subscriptions, nursing license renewal fee, malpractice insurance premiums and union dues are also tax-deductible. Work-related travel and relocation expenses also qualify for tax credits.
Itemizing Deductions
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In most cases the tax credits can be claimed for work-related expenses but only if you itemize your deductions. Itemizing is beneficial only if your nursing work expenses exceed your standard deductions. Before you itemize, add all work-related expenses and see how this figure compares to your standard deduction. Eligibility for claims, the kind of credits one can claim and the amount of money one can save in tax adjustments may vary for each taxpayer.
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References
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