Tax Tips for Back-to-School

salestaxholiday-15“Where has summer gone?!” That refrain is echoing everywhere I turn! (or maybe it just seems like it). For many of us, August means turning a corner – back-to-school time is clearly in sight.

Today I’m offering two tax-related back-to-school tips:

  1. Sales Tax Holidays can be helpful. Iowa’s Sales Tax Holiday is coming up this weekend. On August 7-8, no Iowa sales tax (state or local) will be charged on most clothing and footwear purchases priced under $100. Other states have sales tax holidays too.  TIP: you don’t need to have children going back to school to take advantage of this bonus!
    WARNING: in your rush to save 7%, be cautious about buying everything in sight. Sometimes the word “Sale” puts a rosy glow on items which we would never purchase under normal circumstances. Keep your receipts in case you change your mind after the rose-colored glasses come off.
  2. Iowa’s K-12 Tuition and Textbook Credit can increase your tax refund, so save your receipts and keep records. Why? It applies to more than just tuition and textbook costs. Many of the supplies you buy, from notebooks and calculators to football cleats and show choir costumes, as well as the fees you pay for your children’s K-12 classes and school activities qualify for this tax credit (line 44 on the Iowa tax return).  It’s a 25% credit, up to $250 per child. There are a few rules to be aware of, so check the details, but don’t miss out! It’s a commonly-overlooked credit. I missed it myself for the first nine years my children were in school.

Summer isn’t over yet – enjoy the month of August! But as you get ready for back-to-school season, a little tax knowledge can save you money!  ~Barb

Barb Wollan

Barb Wollan's goal as a Family Finance program specialist with Iowa State University Extension and Outreach is to help people use their money according to THEIR priorities. She provides information and tools, and then encourages folks to focus on what they control: their own decisions about what to do with the money they have.

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