Student Education Tax Credits

by | Nov 15, 2018 | Top Accounting Tutorials | 0 comments

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Student Education Tax Credits

There are two major education tax credits available to students to help offset the costs of higher education: The American Opportunity Credit and the Lifetime Learning Credit. Tax credits are frequently more valuable than tax deductions because credits reduce your tax bill dollar-for-dollar, while deductions only reduce your taxable income.

Of the two education credits currently available, the American Opportunity Credit is the most valuable. The American Opportunity Credit is an expanded version of the Hope Credit. Here is what you need to know about the American Opportunity Credit:

If you, your spouse, or your dependent do not qualify for the American Opportunity Credit, you may still be able to claim the Lifetime Learning Credit. Here is what you need to know about this education credit:

You cannot claim both the Lifetime Learning Credit and the American Opportunity Credit for the same student in the same year, but you can claim one credit for one student and the other credit for another student.

Example: You could claim the American Opportunity Credit for each of your two children, and also claim the Lifetime Learning Credit for yourself and for your spouse. Or you could claim the American Opportunity Credit for all four of you, if you all qualified. But you can’t claim both credits for the same person in the same year.

Remember that the American Opportunity Credit is generally the more valuable tax credit, but it is only good for the first four years of higher education, and has stricter enrollment requirements. If you qualify for the Lifetime Learning Credit, you can claim it any number of years (but there is a tighter income restriction). When you prepare your return on efile.com, we will help you to know which education credit or deduction you qualify for, and which one will be the most beneficial to you. We will then generate the correct forms for you in order to claim the education credit or deduction(s) with your return.

Review our student tax guide.

See an overview of student tax benefits you may qualify to claim on your tax return.

Learn about tax deductions for students.

Find out about tax-free college savings plans.

Learn about other tax credits and tax deductions you may qualify to claim on your return.

Use our free tax tools to calculate taxes or determine eligibility for certain tax credits.

Research & References of Student Education Tax Credits|A&C Accounting And Tax Services
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