Back-to-School Tax Credits

The Fall season is finally here, and much to the dismay of children and teens, school is back in session. But if you, your spouse, or any dependents are going to college this year, there are a few options available to cut down your tax bill.
We all know that education costs, but you can write-off some of those expenses from your taxes. Here are a few rules and credits from the IRS that you could take advantage around tax season.

Qualifying Educational Institutions
Schools that typically offer education beyond high school levels are eligible for tax deductions – these include your common vocational or post-secondary schools and accredited colleges or universities. You can confirm your school’s eligibility by asking the administration staff or searching through the U.S. Department of Education database of accreditation.

One Credit Per Student
The IRS imposes a limit of credits you can claim for each college student within your household, and each family can have a different situation. For example, if you’re claiming two or more students, you can’t write-off the same type of credit for both students – each one must be different for each student.

Deductible Expenses
Like many other tax deductions, the more you spend towards education, the more it subtracts from your owed tax amounts – these expenses are typically tuition, fees, and other related costs for qualifying students. Please check with the IRS for eligible expenses before racking up a tab – you might be surprised by which educational costs aren’t tax deductible.

Types of Education Tax Credits
The IRS only lists two types of tax credits for higher learning:

  • American Opportunity Tax Credit (AOTC) – A credit worth up to $2,500 per year; however, it’s only available during the first four years of any college career. Qualifiers can even get a max refund of $1,000 if they don’t owe any taxes.
  • Lifetime Learning Credit (LLC) – A tax credit you can qualify for no matter how many years you spend in secondary education. Qualifiers can receive a maximum of $2,000 back on their tax return.

Even though there are only two credits available, that doesn’t necessarily mean there aren’t any options for situations like non-residency or reduced income. Be sure to have a local tax professional take a look at your Form 1098-T tuition statement to identify any opportunities.

And don’t forget to visit to e-file a personal tax extension and get six months of extra time to file your income taxes. Download our FREE Express 4868 App for your iOS or Android device – e-file and get approved in minutes without even leaving your study session. Contact us with any questions at 803.514.5155, Monday through Friday from 9 a.m. to 6 p.m. EST or email us at your convenience with [email protected].

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