This is probably the most boring topic I have written about here, but it’s certainly of interest to you if you have paid for music lessons (or other educational expenses) for a K-12 child in Minnesota in 2013. Did you know that there is both a K-12 Education Tax Subtraction as well as a K-12 Education Tax Credit? Here is a link to all the details. Below is are some bullet points that relate to guitar lessons at Dan’s Guitar Studio:
Minnesota has two programs: K-12 Education Tax Subtraction & K-12 Education Tax Credit. Both programs can lower your taxes and may increase your refund.
You must have documentation of your expenses. (Students at Dan’s Guitar Studio have been provided with their 2013 transaction history)
You can’t use the same expense for both the subtraction and the credit.
Everyone who purchased music lessons for their K-12 child qualifies for the subtraction.
The subtraction will reduce your tax liability by 5.35-9.85% of the music lessons expense, depending on your 2013 MN tax bracket. For example, if you are married filing jointly and made $35,481-$140,960 (7.05% MN income tax rate) in 2013, and paid $1000 for music lessons in 2013, your tax liability would be reduced by $70.50 ($1000 x .0705). This is assuming you have not already maxed out your K-12 education subtraction with expenses such as school supplies, transportation, etc. See limits below.
For the credit, you must meet certain income and filing requirements and the amount of the credit will vary depending on other tax credits you may have claimed.
To be eligible, your child must have been in grades K-12 during the year and must have attended public or private school.
Instructor must be qualified. (Dan qualifies by having a B.A. in Music)
Education expense must be claimed for the year that it was paid for.
The subtraction limit is $1625/child for K-6 children, $2500/child for 7-12 children.
If you qualify for the credit, it is to your advantage to take the maximum credit allowed before taking the subtraction.
You may have to refer to the program details or a tax professional for further information pertaining to your specific situation.