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Looking Works to Control the Cost of a College Education - Among the most significant barriers facing
Vermonters who are seeking a college degree is the cost of an undergraduate education. Sterling College, a leading voice for environmental stewardship in the United States, is making a new commitment to providing financial aid to graduates of Vermont high schools, as well as associate degree recipients and transfer students.

Sterling College is committed to providing access to students who wish to pursue studies in Ecology, Environmental Humanities, Outdoor Education, or Sustainable Agriculture. While Sterling is a private college, it has committed to match in-state public
university tuition of the University of Vermont, for all Vermonters who gain admission for September 2013.

Sterling College is only one of seven federally recognized work colleges helping students reduce tuition and living expenses through on-campus work. Additionally, the College’s Board of Trustees recently limited the increase in tuition to only 2% for 2013-14. “The board understands that these are very challenging financial times for families in Vermont, and it is our intention that Sterling help ease the transition for students who want access to our unique programs of study,” said Wendy Koenig, Sterling College trustee and chair of its Enrollment Committee. (see HERE)

“We know that the growing career opportunities associated with the Sterling College curriculum are the most important areas of challenge facing society in the 21st century, and, that Vermont is the epicenter in the nation for studying critical disciplines focused on food, water, health, energy, soil, climate, and education, as such, it is essential that students who aspire to become environmental stewards have access to a Sterling education,” commented Matthew Derr, Sterling’s new president at the College’s most recent admission open house.

“Sterling College is taking important action to support Vermonters who aspire to earn a college degree. The College is committing itself to keeping educational costs under control. I commend President Derr’s leadership on both access and affordability,” offered Congressman Peter Welch of the College’s recent actions. (see HERE)

“Sterling College is committed to educating future generations of environmental stewards, and providing financial aid is a key commitment we make to see that that happens” continued President Derr. “We think big and act on our convictions, whether it’s divesting our endowment from fossil fuels or offering scholarships to climate justice activists.

Is College Expenses Not Deductible ? - With less than two weeks to go to file your 2012 tax return, you
Today's question:

Expenses for insurance, medical expenses (including student health fees), room and board, transportation, and personal living expenses are not considered qualified education expenses even if the amount has to be paid to the institution as a condition of enrollment or attendance.

It's also important to note that if you are married filing jointly and your Modified Adjusted Gross Income (MAGI) is $130,000 or less, your maximum tuition and fees deduction is $4,000. If your MAGI is $130,001-$160,000 your maximum deduction is $2,000, and if your MAGI is over $160,000 no deduction is allowed.

The Tuition and Fees Deduction section of IRS Publication 970 gives all the details of the tuition and fees deduction.

Clare Levison, CPA
Blacksburg, VA

Previous questions:

You should file your 2011 tax returns as soon as possible even if you do not have the funds to pay the tax liability in full. The IRS encourages taxpayers to "get into compliance" by filing delinquent tax returns by mailing them to the same Service Center that you mail your 2012 return. If you owe taxes with the return there will be a Failure to Pay penalty (1/2 of 1% per month up to 25%) and interest will run on the tax and the penalty.

It sounds like you might not have the money to pay the taxes owed with the return. If you have the ability to pay monthly on an Installment Agreement you can file a Form 9465, Installment Agreement Request, with your return or separately. Also, you can get an "Online Payment Agreement" application at www.IRS.gov. If you owe $50,000 or less, the IRS will allow up to 72 months to repay your tax, penalty and interest. There is a fee to establish an Installment Agreement of $105 if paid by check, money order or credit card but is reduced to $52 with electronic fund withdrawal. This user fee is reduced to $43 by filing Form 13844 for low income taxpayers.

There are other options, such as filing an Offer in Compromise, if you cannot repay your taxes over the 10-year collection statute of limitations. Also, for taxpayers owing greater than $50,000 financial information is required when establishing an Installment Agreement. These are topics for another day.

Mary Lou Gervie, CPA
Watkins Meegan, Bethesda, Md.

Previous questions:

A case could be made for taking a loss for the change in value of the mutual fund over four years based on the value you will receive, but that is a very specific case that would require the personal engagement of a CPA or tax attorney. May I also opine that considering the state of the stock market in 2009, there is a good chance that the mutual fund's value has only increased since then?

Kelley C. Long, CPA
Shepard Schwartz & Harris, Chicago

Q: I live in Washington state, where gay marriage is legal, we have no state income tax, and we are a community property state. My partner and I have been together for 12 years, but we have not yet converted our domestic partnership to marriage since it became legal in December. In previous years we have both filed our federal returns as single, but this year we bought a house together and we are wondering what the proper way would be for us to file our federal income tax.

A: Federal law does not treat same-sex or registered domestic partners (RDPs) who are married under state law as married. Thus, such couples may not file their federal income tax return as married filing jointly (MFJ) or as married filing separately (MFS). So, being married under state law will not change your filing status under federal law.

Because you live in Washington state though, being married or RDPs changes how much income you each report on your federal returns. The IRS will follow state community property laws and has provided guidance for RDPs and same-sex couples in three such states: California, Nevada and Washington.

Basically, spouses or RDPs in these states split their community property income, with each spouse or partner reporting half of it on their federal returns. The IRS has provided several FAQs, as well as Publication 555, and Form 8958, to help in determining how to report community property income (as well as deductions and credits) on each spouse's federal tax return.

You each still file a separate return (not a joint return). Note that there could be changes to the filing rules depending on the outcome of the U.S. Supreme Court's decision on the constitutionality of the Defense of Marriage Act (DOMA).

For the mortgage interest, if you are married or RDPs in Washington, you can show the split of the mortgage interest on Form 8598 (and report your share on your Schedule A, with a reference to "See Form 8958"). If you are not RDPs or a married couple in Washington, you each determine your share of the mortgage interest and you each deduct your share that you paid.

One of you likely received a Form 1098, Mortgage Interest Statement, with only one name and Social Security Number on it. The IRS suggests that the other payor attach a statement to their return explaining that they paid part of that Form 1098 amount and provide the name and address of the person who received the Form 1098, and how much of the mortgage interest each owner paid. On Schedule A, Line 11 for mortgage interest, add "See attached" so the IRS knows the statement explaining the interest amount is on the return (since the IRS does not have a Form 1098 for that owner). For details, see IRS Publication 936, page 9.

Annette Nellen, CPA
San Jose State University, San Jose, Calif.

PREVIOUS QUESTIONS

• The $200 paid to Massachusetts can be claimed as an itemized deduction on your 2012 tax return.

• The $400 refund from Rhode Island will need to be reported as income in 2012 if you paid taxes to Rhode Island in 2011 and claimed the taxes as an itemized deduction on your 2011 tax return. The entire amount of the refund would be reported as income if the entire amount of Rhode Island taxes were paid in the 2011 calendar year. This would include withholding amounts, quarterly estimates, extension payments and balance-due payments.

A portion of the refund may be taxable if the Rhode Island taxes credited on the 2011 tax return were paid over two years. In other words, you need to determine if payments were made in the 2012 calendar year but were credited in the 2011 tax-reporting year.

These type of payments would include a 2011 fourth-quarter estimate paid in January 2012 as estimates are due January 15th. Another type of payment is an extension payment that was paid in April of 2012 but was for the 2011 tax return year.

Therefore, if a state tax refund is the result of payments paid in two different years, you make an allocation to exclude the portion of the refund that was allocable to the 2012 calendar year payment. Please note that the portion that was excluded from income is also an offset to your 2012 state tax deduction.

Don Zidik, CPA
McGladrey LLP, Boston

Five years ago, Congress passed a bill allowing a single person to deduct up to $500 of property taxes on a primary residence in addition to their standard deduction. The limit was $1,000 for a married couple filing jointly.

Unfortunately, this provision was only put in place for 2 years, so for the years 2008 and 2009, a person could deduct at least a portion of their property taxes, even if they were not itemizing.

The Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010 extended some tax breaks, but this tax break was allowed to expire and has never been reinstated.;

The instructions to for the 2010 Form 1040 on the IRS website lists expired tax benefits on page 6. For more information on itemized and standard deductions:

Frequently asked questions for itemized and standard deductions

Mackey McNeill, CPA
Mackey Advisors, Bellevue, Ky.

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The budget Crisis Has Dramatically Reduced Access to Colleges - The budget crisis has dramatically

In a study released this week, the PPIC says the state cut $1.5 billion from community college budgets from 2007 to 2012, resulting in the loss of one in five courses. That has left an estimated 600,000 students peering through closed classroom doors..

What's interesting is who these students are: primarily, the PPIC says, those of lower ability.

Proposition 30 and the improving economy will mean some new money to restore counselors and courses, but not enough. Gov. Jerry Brown has proposed reforms, including more online courses and a limit on how many state-subsidized units a student can take; that would free up space for lower-skilled first-time students.

Parcel taxes, the PPIC suggests, may be an option (see HERE). Student fees, at $46 a unit, are less than half the national average; they could go up again without affecting access because fees are waived for poor students. The state needs a combination of strategies, and more of them.

California has to keep its promise of higher education for all --not just for the sake of individuals but for its economic survival.

Source : The San Jose Mercury News

Strategic Approach to Dealing Lith Education Budget Shortfall - Faculty, staff and students at With its draft Letter of Expectation from Alberta Enterprise and Advanced Education in hand, the college knows its operating grant will be roughly $40.4 million, down from about $47 million last year.
Lethbridge College got a budget update last week at two town hall meetings.

At the town halls, people wanted to know how the college would balance its budget and whether it would dip into reserves. "We were clear about what our goal is, which is to submit a balanced budget to our board," said Paula Burns, president. The college will not be doing across-the-board cuts but will take a strategic approach to position the college in the new post-secondary reality. Burns said she couldn't yet say whether the budget cuts will mean job losses but that could happen.


Even before the letter arrived, Burns said the college was looking at its strengths and how it meets the need of the economy, both provincially and regionally. Her vision of the college is that it will be a leader in transforming the education system (see HERE).
"We are going to be a big part of the move toward whatever it's going to look like, which is very unclear at this point," she said.
Burns said she wasn't surprised by anything in the letter and added she believes there's plenty of room for consultation and for the college to provide leadership in defining itself and how it contributes to Campus Alberta.
Faculty at Lethbridge College are well aware of the possibility of job losses, even though that has yet to be finalized.
"It's very clear that administration wants to have a fairly collaborative process in which faculty members also contribute ideas to how the college could manage such a massive cut to their operating budget," said Rika Snip, president of the Lethbridge College Faculty Association.
The draft letters of expectation sent to all post-secondary institutions talk about reviewing the programs being offered to build on existing institutional strengths while advancing the Campus Alberta system and offering programs that employers and students want. The letters also talk about reducing program duplication.
"We're a comprehensive community college. As the system moves to creating these specialized centres and trying to reduce duplication they're also going to reduce access for students because there are going to be fewer programs, students are going to have to move. It will be more competitive because there will be fewer programs," Snip said.
Faculty also have concerns about the consequences of the budget cuts.
"It seems to me the government has decided that the professions are all too highly overpaid and particularly college administrators are too highly paid so we can darn well take a cut. What it means, though, is that the cut will be carried by particularly casual faculty and programs that are small," Snip said.
Casual faculty have no collective agreement and program cancellations could lead to further job losses.
"For those who remain the implications suggest that we will have larger classes and that faculty therefore will be forced to figure out ways to manage their workload with a higher student load," she said.
Snip said faculty are feeling generally disappointed in the government that, on the one hand, wants post-secondary institutions to educate people for the workforce and the economy but, on the other, doesn't want to pay for it.
The Lethbridge College Students' Association also came forward with concerns about the Letter of Expectation (see HERE).
"The thing with these mandate letters is once they're signed it gives the government a lot of leeway in making these decisions, possibly to the detriment of students," said Dillon Hargreaves, LCSA president.
The LCSA doesn't support the government's intentions for the post-secondary education system. Hargreaves said the government will be evaluating programs offered and deciding what programs will be offered where. And if students have to leave home anyway Hargreaves predicts they'll head right out of province.
Source : www.lethbridgeherald.com

Florida Education Budget Includes $480M For Teacher Raises - Sen. Bill Galvano, R-Bradenton, gave the Senate Education Appropriations Committee its first peek at his proposed education budget Tuesday, and it includes $480 million for teacher raises.

Galvano's working plan increases K-12 funding by $1.1 million -- not quite as much as Gov. Rick Scott has suggested in his own proposed budget.

But the Senate seems to be following Scott's lead on salary increases for teachers.

There is one notable difference: Scott wants all teachers to receive a $2,500 across-the-board salary increase. The Senate Education Appropriations Committee is recommending a merit-based distribution.

"We are giving discretion to the districts to award these funds," Galvano said. "We are having the districts base the award on student achievement." (see HERE)

Additionally, the Senate's proposed budget gives teachers $14 million to purchase classroom supplies, and beefs up school-security spending by more than $12 million.

On the higher-education front, Galvano's proposal restores the $300 million funding cut universities took last year. It also includes $58 million in new performance-based funding.

Galvano stressed that this was not the final version of the Senate's proposed education budget. He intends to make a final recommendation to Senate Budget Chairman Joe Negron by March 27, he said.

"It's good to have significant increases in our education budget and be able to restore funds where in the past, we've had to take funds," he said.

Sen. Maria Lorts Sachs, a Delray Beach Democrat, called the pitch "a good starting point."

"I've always been a great believer in home rule for our school districts," Sachs said. "I think we're beginning to get back to a common-sense approach to education."