We at College Connectors are not financial advisers, or accountants, but we know some folks who are.  Here are some tax return pointers you may be interested in as they apply to college related topics hot off the press from the Minnesota Society of Certified Public Accountants.

College and Taxes: MNCPA Outlines the Importance of Determining

Who Takes the Dependency Deduction — Parent or Student

If a member of your household is a college student or returned to school for additional training in the past year, there are important tax considerations to discuss with your CPA as you organize your state and federal income tax return information for 2012, advises the Minnesota Society of Certified Public Accountants (MNCPA).

One important tax planning decision relates to the dependency deduction. Students who file a tax return might incorrectly claim their own personal exemption, which denies a parent or guardian from taking the deduction for their dependent child. But talking to the student prior to tax season and meeting with a CPA can help you determine who is entitled to the deduction.

Who can claim the deduction for the student is based on the tax code’s tests of age, residency, relationship and the level of financial support the student receives. “The support test is often the deciding factor. Who qualifies as providing most of the support can be especially complicated when college savings plans, loans, scholarships, military benefits or gifting are part of the equation,” notes CPA Steve Warren with Lehrman, Flom & Co. CPAs in Minneapolis.

The IRS will only accept one return with the personal exemption deduction for a specific individual and that will normally be the first filed return. Therefore, the parent could lose the deduction advantages along with any related tax benefits if the child incorrectly claims it first.  In addition, the processing of the parent’s return will be delayed if the deduction for the child’s exemption is attempted a second time. The parent also could be audited and/or face an assessment for more tax, penalties and interest. If the student claims a deduction he or she is not entitled to (whether it relates to the dependency exemption or anything else), then an amended return is required, Warren explains. “Any parent with a child who prepares his or her own tax returns will be well advised to either explain to the child what tax benefits he or she is entitled to if the parent knows or meet with a CPA to learn the best way to prepare the returns,” he says.

Besides the dependency deduction, there are other college related tax benefits that will be reinstated through 2013 in The American Taxpayer Relief Act of 2012 passed on January 1, 2013. They include:

Tax credits

American Opportunity Tax Credit — You may be able to claim a credit of as much as $2,500 for qualified tuition and related expenses for each eligible student on your federal individual income tax return. This credit is partially refundable (40 percent), which means you could claim the credit and get a refund even if you do not owe taxes.

Lifetime Learning Tax Credit — You may be able to claim a credit of as much as $2,000 for qualified tuition and related expenses per tax return. This credit is nonrefundable. .

Tax deductions

Student Loan Interest Deduction — You may be able to deduct as much as $2,500 of the interest you paid on student loans on your federal individual income tax return.

Tuition and Fees Deduction — You may qualify to deduct as much as $4,000 in qualified tuition and related expenses even if you do not itemize deductions on Schedule A, Form 1040. This deduction may be beneficial to you if you cannot take either the American Opportunity or Lifetime Learning Tax Credit.

Questions about college planning or how to reduce your tax burden while in college orpaying for college? Contact a CPA. Don’t have one? Visit MNCPA or call 800.331.4288.

Accountants can help with these financial questions about tax returns.  As Independent Educational Consultants, we help with the other important tasks related to college admissions, the college search and application processes.  Contact College Connectors for non-tax related college search, admissions and application questions. 

Looking Ahead to Spring ACT Testing: Tips from ACT Tutors:  After tutoring more than 1500 students in the past 5 years, we have compiled our “top tips” for high school juniors:

1.   Pick a Spring Test Date– April 13 or June 8 — to Take the ACT Test: Since the ACT covers Algebra, Geometry, and Trigonometry skills, most students will post their best scores at the end of junior year, nearing the completion of their current math curriculum. For students with literature-based English classes or reading-intensive History classes, they, too, benefit from additional months of classroom work.

2.  Sign Up Early for Your Preferred Test Location: Many, but not all, high schools serve as ACT testing sites.  It’s a good idea to go on-line to www.actstudent.org  and set up your student account as soon as you select your test date. Sites can accommodate only a certain number of students, so sign-up early! Registration closes 5 weeks before the test, and late registration closes 3 weeks before the exam. To register, you’ll need to fill out a highly detailed survey, listing your coursework, extracurricular activities, and academic goals prior to signing up for your preferred testing site, so have that information handy when registering.

3.  Reduce Your Stress  –  Practice on “Retired” ACT Exams:  Practice makes a huge difference to ACT scores.  With practice, students become highly familiar with how questions are worded and how to pace the test.  Students in our program, ACTReady, complete 5 full ACT exams and review their errors.  Since similar questions are on each ACT, students who practice gain speed and accuracy, building their testing skills, confidence and scores.

4.   Build Your Skills Over Time: Plan ahead and either register for an ACT prep program or purchase a workbook.  Students who begin practicing at least 6 weeks prior to their test date quickly discover the test is not as overwhelming as it first appears. Select your test date based on your ability to devote time to practice. By reviewing errors, students improve not only their knowledge of the test, but their ability to make ‘smart guesses’.

5.  Stay Positive: For the vast majority of students who have practiced beforehand, their ACT scores accurately assess their overall academic abilities, as reflected on their transcripts and through letters of recommendation.  Colleges know your score is a ‘snapshot’ of your skills on a given Saturday morning.   Practice, do your best, stay positive, and be assured that there are many great colleges that can meet your academic goals.

By following the ACT Ready tips, you’ll be in great shape to take your ACT.   We at College Connectors use those scores as one piece of information to guide your college search and colleges use them as one piece of information to make their admissions decisions. 

You may know that our building in Dinkytown, the home of College Connectors, is scheduled to be torn down and we have to move. We’ve worked with many great students during the last 6 years; we miss them and we’ll miss our old offices. Our current and new students are wonderful too and so is our new space.

After a long search, we’ve found a great suite of offices at 5100 Edina Industrial Blvd, Minneapolis. The location is centrally located for families and students from throughout the Twin Cities Metro area and the covered parking is free.

Here’s our contact information for your records.  Website and email stay the same.

5100 Edina Industrial Boulevard, Suite 230, Edina/Mpls, MN 55439

Phone: 952-303-3696

FAX: 952-446-7620

Best,

Valerie Broughton, Donna Kelly, Kate Malczewski

College Connectors

 Get Noticed!

The Minnesota State Fair starts on August 23rd this year.  The first big college fair in town is scheduled for    August 24.  Don’t miss either one

Connect to the College Fair information for Twin Cities schedule for this fall.

To avoid a spinning headache when thinking about going to a College Fair follow these tips. Getting the most from your trip to College Fairs?    You’re on your own for getting the most from your trip to the State Fair!

What do colleges look for?  Is it true that students need dozens of activities? Is it better to get top marks in regular classes or average marks in honors/AP/IB courses?  How important is the college essay?  And what is “demonstrated interest” and why does it ever matter?!

There are answers to these sometimes perplexing questions.   We have those answers and want to share them with you.

As professional educational consultants we keep our fingers on the pulse of college admissions through our research, college visits, and active membership in leading professional organizations such as Independent Educational Consultants Association.  A recent IECA survey found that selective colleges rank the following as important admissions factors:

1.      Rigorous high school curriculum
2.      Grades
3.      Solid scores on standardized tests
4.      Passionate involvement in a few activities
5.      Letters of Recommendation
6.      A well-written essay
7.      Special talents or experiences
8.      Demonstrated leadership
9.      Intellectual curiosity
10.   Demonstrated enthusiasm

This is how colleges make their choices.  How will you make your choice?  We’re here to help.  Contact us.

Click here to see IECA’s expanded information on each factor:

Here are our testing guidelines:

1. Pick one test – ACT or SAT
2. Choose a test date that’s convenient for you
3. Prepare for the test – on your own, with a tutor, or take a class
4. Plan to earn a score that accurately reflects your ability
5. Plan to take the test just once

There’s lots of debate among college faculty(who influence admissions policies), admissions representatives, test prep companies, and the testing companies themselves, as to which test is better, easier, more predictable,  the SAT or the ACT.   Actually the two tests are very highly correlated.  And all colleges will accept scores from either one.  So it doesn’t really matter which one you take.  Except for one issue:  If you’re likely to apply to colleges that require additional test results, scores from SAT Subject tests called SAT IIs, you might want to review the guidelines of those colleges.  Because some colleges will waive the SAT II requirements if you submit an ACT score but require that you take the SAT IIs if you submit SAT scores.   Just something to think about.

Keep in mind, the purpose of the tests is to predict whether an applicant has the academic background to be successful at a given college.  Historically, the SAT was developed to help the Ivy League colleges know which Midwestern bumpkins they should allow to attend!  Previously, they had admitted students (boys) based on the recommendations of the headmasters of the eastern preparatory school they attended.  If you didn’t attend one of those schools, you couldn’t be recommended.  The SAT was developed as a way to identify talent more broadly.   That’s a good thing, right?

Many students fear taking these tests, thinking that if they don’t do well enough on the test, they won’t get into a given college.  Let’s think about that.

If indeed the test results are correlated with student success, that is, if the test results can predict when a student has the academic background to succeed at the college, then maybe it means that if you don’t get a certain score, it’s likely you won’t be successful at that school.  Knowing that is a good thing – you don’t want to go to a college, and pay money to attend a school where you have very little chance of success.

With that thinking, the students needn’t fear the ACT/SAT. Instead, here are some ways to use your test results to your own advantage.

The goal of a college search is to find the set of colleges where you’ll thrive and succeed.  Knowing  your score compared to the students who are admitted gives you valuable information.  Colleges where your score is in the top range of the admitted student’s scores are likely colleges where you’ll be one of the smarter kids there.  Colleges where your score is in the bottom range of the admitted student’s scores are likely colleges where you’ll struggle and have to work very hard.  There’s nothing wrong with working hard.  You just need to know where you stand.

If you want to be at the top of the class, get involved in lots of activities and have a vibrant social life and go to all the athletic and cultural events your college has to offer, maybe you should focus on colleges where you’ll be in the top group.  If you’re the kind of person who is best motivated when surrounded by people who do well even if you need to do a little chasing to catch up with them, then maybe it’s more appropriate for you to focus on colleges where your scores are in bottom range of the colleges you select.

We recommend you set your intention to take the test just once, but there are instances when even we recommend you give it a another try.  How can you decide whether or not to take the test the second or third time?  Here are some good reasons to retake.

1. Did you prepare thoroughly the first time or is there more you can do to learn how to take the test?
2. Can you explain why you might not have done your best?
3. Do you need an extra point or two to qualify for a scholarship or a bigger scholarship at one or more of the colleges you’ll likely attend?  Check out the Net Price Calculator at your colleges to find out if a higher ACT/SAT score might make a difference in your scholarship award.  You’ll need to have your list of colleges in order to figure this out.

College Connectors has some advice on creating your college list.  Contact us @ 612-331-4567.  We help lots of students every year.

College Connectors and Chyten Educational Services has joined forces to help you devise a game plan for your College Search.  Now that you have your PSAT results, it’s time to get busy.  See our previous blog about what you should be working on.

Please plan to join us on January 17 at 7:00. Chyten is offering a PSAT Score Analysis. They’ll break down your test results to help you figure out a preparation plan as you decide which test you’ll take (ACT or SAT) and when you’ll take it.  We want you to make the best decisions for you.

There is no charge for the workshop and analysis.  Come to this Information Night, designed for parents and student, at Chyten Educational Services, 3525 Plymouth Blvd, Ste 109, Plymouth, MN  55447.

Call Chyten to reserve your seat at 763-559-TEST(8378).

Receiving PSAT results usually brings the importance or pressure of the college search home to students and to their parents.  It’s time to do something – but WHAT?

Here are a few general guidelines to get you started on the right path:

1.  Keep studying – grades are the most important factor colleges consider when making their admissions decisions.

2.  Take some time to consider your academic strengths and the environment in which you learn best.  College is about learning so thinking about the characteristics of the college where you’ll succeed academically is important.

3.  Next, you can think about other preferences you have about college.  Factors like location, size, selectivity, extra-curricular activities, that is, the non-academic part of college need to be considered too.

4.  Research some colleges by visiting their websites, checking out what students say about them on sites like Unigo.com, to test your preferences.  Plan some college visits.

5.  Then of course, you need to pick a test date and prepare for your college entrance exams, either the ACT or the SAT.  If your colleges are likely to require SAT II exams, you’ll need to fit them into your schedule.

There’s help available to you in each of these areas.  Your teachers want to help you succeed academically, so when you’re studying, be sure to ask questions and meet with teachers before or after school to get the help you need.  Your school counselor, websites, and Independent Educational Consultants can help you with the next three steps.  Test prep tutors, classes and books can add to the suggestions in the preparation link we’ve included above.

Don’t let the next few months pass you by without tackling some of these tasks.  You have your PSAT results, take the next step.

Click here for information about a workshop we’re doing to help you take the next step.

Net Price Calculator Interview