Tax Credits on Back-to-School Education
With school, there comes hard work, studying, and responsibilities. But even better, there comes a few tax credits as well. If you, your spouse, or even a dependant is attending college this Fall, your education costs could save you some money around tax time. Here are some education tax credits that you may able to claim on your next federal tax return – brought to you by the IRS.
American Opportunity Tax Credit (AOTC)
This credit is only available for the first four years of your college career and is worth up to $2,500 per year. If you qualify, you can receive up to $1,000 back as a refund even if you don’t owe any taxes.
Lifetime Learning Credit (LLC)
The LLC credit can get you up to $2,000 back on your tax return, and the years you can qualify for this credit is unlimited.
One Credit/One Student
Unfortunately, you can only claim one education tax credit per student in your household. If two students qualify for a tax credit in the same year, you can only claim different credits for each student.
For Example: One student gets the AOTC credit, while the other get the LLC credit. They both can’t receive the same credit.
Qualified Expenses
You can also come up with a tax credit by using qualified expenses. Typically, these expenses are costs for tuition, fees, and other related costs for a qualifying student. You can find more about regulations regarding each credit at IRS.gov.
Eligible Educational Institutions
Institutions that offer education beyond high school are known as eligible schools. These are your typical, accredited colleges, universities, vocational schools, and postsecondary schools. You can inquire if your school is an eligible institution simply by asking your school’s administration staff, or you can look up your school on the U.S. Department of Education’s Accreditation database.
There are many more education tax credits available for nonresident students, limited incomes, and what has been listed in your Form 1098-T, tuition statement. You can find more details at IRS.gov. Education is important, and it can lead to more favorable employment and financial opportunities. But why not be financially aware while you’re already in school?
ExpressTaxFillings wishes you a very successful, and perhaps profitable, school year.
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