PWX03: Education Tax Benefits Study Guide

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The study guide is provided to guide you through the course material in a step by step format.

Course material is a PDF document.

Chapter 1 – §529 Qualified Tuition Programs

Assignment: Chapter 1 <<>> Review Questions  Group #1: # 1-5

When you have completed this chapter, you should be able to:

• Compare prepaid tuition plans with college savings plans;
• Identify the expenses considered qualified education expenses under a qualified tuition program and the educational institutions at which such expenses may be incurred;
• Recognize the rules applicable to IRC §529 qualified tuition program contribution limits and the tax treatment of plan contributions; and
• Apply the applicable tax law to IRC §529 qualified tuition program distributions.

Chapter 2 – Coverdell Education Savings Accounts

Assignment: Chapter 2 <<>> Review Questions Group #2: #1-6

In this chapter we will look at the rules governing Coverdell Education Savings Accounts (ESAs). When you have completed this chapter, you should be able to:

• Apply the federal income tax rules to ESA contributions, earnings and distributions;
• Recognize the eligibility requirements applicable to ESA contributors and beneficiaries;
• Identify the ESA contribution limits; and
• Apply the rules governing ESA rollovers.

Chapter 3 – Education Savings Bond Program

Assignment: Chapter 3 <<>> Review Questions Group #3: #1-5

In this chapter we will look at the federal education savings bond program rules. When you have completed this chapter, you should be able to:

• Identify the U.S. savings bonds included in the education savings bond program;
• List the education expenses that qualify under the education savings bond program;
• Recognize the kind of educational institutions that are eligible for inclusion in the education savings bond program;
• Identify the benefits whose receipt reduce a taxpayer’s qualified education expenses; and
• Calculate the tax-free portion of adjusted qualified education expenses.

Chapter 4 – Education Tax Credits

Assignment: Chapter 4 <<>> Review Questions Group #4: #1-6

When you have completed this chapter, you should be able to:

• Recognize who is eligible to claim the tax credits;
• Identify the expenses considered qualified education expenses and those expenses that do not qualify;
• List the benefits for which qualified education expenses must be adjusted;
• Define an eligible educational institution;
• Calculate the available tax credits; and
• Apply the tax-benefit recapture rules.

Chapter 5 – Taxation of Educational Assistance, Tuition & Fees and Student Loans

Assignment: Chapter 5 <<>> Review Questions Group #5: #1-5

When you have completed this chapter, you should be able to:

• Identify the tax treatment of educational assistance, including –
  • Scholarships and fellowships,
  • Fulbright grants,
  • Need-based education grants,
  • Veterans’ education benefits, and
  • Tuition reductions;
• Recognize the federal income tax treatment of tuition and fees paid for higher education;
• Calculate the student loan interest deduction available to a taxpayer; and
• Apply the applicable federal income tax rules to student loan cancellations and repayment assistance.