Back to school can be an expensive time of the year for families, but saving receipts now from educational expenses can add up to money in your pocket later.
From textbooks and school supplies to electronics and apparel, retailers are ready to ring up sales. Back to school is big business. According to the National Retail Federation's annual survey, families will spend about 688 dollars per child on back-to-school supplies this year.
"It's about an 8 percent increase that parents are spending this year on school supplies than last year," said Taylor Putz, community relations and outreach manager at Prepare + Prosper, a local non-profit organization that helps lower and moderate income families with free tax assistance and financial services.
School may be on the brain now, but Putz wants parents to be thinking about tax time too.
"We want parents to be aware of the K-12 Education Credit and K-12 Education Subtraction," said Putz. "Our message for parents is to make sure when they're doing back to school shopping that they're saving their receipts from any school supplies and educational opportunities."
Income limits apply to the state's K-12 Education Credit, but not the K-12 Education Subtraction. So if you're purchasing pencils and paper, calculators and books, save your receipts for tax time.
"The credit essentially increases someone's tax refund, so it puts more money back into the pockets of hard working families. The subtraction actually reduces the amount that parents have to owe," said Putz.
Not every school expense qualifies, only those items needed for learning. Back-to-school clothing, backpacks, and Kleenex don't make the cut, but gym shoes, textbooks, and musical instruments do.
"If you're going to rent or purchase a violin during the school year, it gets to be costly, so making sure that you're saving receipts from purchases of musical instruments," said Putz.
And there's other education related expenses that qualify.
"It also could include things like field trips during the school day, it could also include academic camps during the summer and after-school tutoring taught by a qualified instructor," said Putz.
Bottom line: if you're unsure, just keep your receipts. Each year, Prepare + Prosper offers free tax assistance, and the organization finds that many people are unaware that dollars spent in the summer for supplies could earn them money back come tax day, April 15.
The Minnesota Department of Revenue
has more information on their website about which educational purchases qualify.
Alexandra Renslo email@example.com
August 21, 2017