College Tax Credits and Deductions for 2014
The primary benefit of seeking out higher education is of course to open the doors to a wider job market and more earning potential, but it also comes with some impressive tax benefits. Below is a quick look at some of the education tax credits and breaks you may qualify for:
American Opportunity Credit
This is tax credit was formerly known as the Hope Credit. The credit is designed for qualified students that are paying tuitions, fees, and educational materials associated to secondary schooling. If you are eligible you may receive a credit of up to $2,500 for up to 4 years.
Lifetime Learning Credit
This credit is similar to the American Opportunity Credit in that you are eligible if you incur educational expenses. The main difference is that qualified students have no limit to how many years you can claim the Lifetime Learning Credit, but you can’t claim both the American Opportunity Credit and the Lifetime Learning Credit in the same tax year.
Tuition and Fees
If you are a working student whose annual income disqualifies you for the above mentioned tax credits you may be eligible to deduct up to $4,000 of your expenses to reduce your taxable income. To qualify for this deduction you must have paid educational expenses for yourself, your spouse, or a qualified dependent.
Student Loan Interest
Once you have graduated and are paying on your federal student loans you may be able to deduct interest up to $2,500. To qualify you must make less than $75,000 for a single person and less than $155,000 for married couples.
Other Educational Tax Breaks
If you have children that are far from college age you can still benefit from education tax breaks if you set tax advantage savings accounts and plans. To be sure and get all of tax credits you qualify use TurboTax online software. TurboTax has a free tax refund calculator you can use at any time.
The primary benefit of seeking out higher education is of course to open the doors to a wider job market and more earning potential, but it also comes with some impressive tax benefits. Below is a quick look at some of the education tax credits and breaks you may qualify for:
American Opportunity Credit
This is tax credit was formerly known as the Hope Credit. The credit is designed for qualified students that are paying tuitions, fees, and educational materials associated to secondary schooling. If you are eligible you may receive a credit of up to $2,500 for up to 4 years.
Lifetime Learning Credit
This credit is similar to the American Opportunity Credit in that you are eligible if you incur educational expenses. The main difference is that qualified students have no limit to how many years you can claim the Lifetime Learning Credit, but you can’t claim both the American Opportunity Credit and the Lifetime Learning Credit in the same tax year.
Tuition and Fees
If you are a working student whose annual income disqualifies you for the above mentioned tax credits you may be eligible to deduct up to $4,000 of your expenses to reduce your taxable income. To qualify for this deduction you must have paid educational expenses for yourself, your spouse, or a qualified dependent.
Student Loan Interest
Once you have graduated and are paying on your federal student loans you may be able to deduct interest up to $2,500. To qualify you must make less than $75,000 for a single person and less than $155,000 for married couples.
Other Educational Tax Breaks
If you have children that are far from college age you can still benefit from education tax breaks if you set tax advantage savings accounts and plans. To be sure and get all of tax credits you qualify use TurboTax online software. TurboTax has a free tax refund calculator you can use at any time.