So you'd end up paying 1.45% on the first $200,000 and 2.35% on the rest. The 0.9% Medicare surtax is a recent change and is intended to help pay for health reform. Investment income taxes: Capital gains, dividends and interest represent unearned income..
The tuition and fees deduction sounds good on the surface; it offers up to a $4,000 deduction. This option is open even if you donât itemize deductions. But since the deduction is for the taxpayer, not the student, it may not be the most beneficial for taxpayers with more than one student in the family.
Hereâs everything you need to know about education-related tax deductions and credits for college tuition and expenses. For help with other issues, check out our complete Tax Guide. Tax Credits for College Students 1. American Opportunity Credit. Up to $2,500 tax credit, up to $1,000 refundable, four years maximum per student