It’s back-to-school time for everyone from kindergarteners to graduate students. In the latter case—and for most higher education—you can claim expenses related to schooling as a tax credit. The IRS has two nonrefundable educational tax credits, both of which will reduce your tax liability dollar for dollar. These are:
- American Opportunity Credit: Available for four years of college, with the maximum credit per student set at $2,500. This credit is available for students 18-24 years of age who are not self-supporting and who are pursuing a full-time degree.
- Lifetime Learning Credit: Available for up to 20% of the first $10,000 of qualified expenses related to undergraduate, graduate, or certificate-level courses. Students must be in classes at least part time, except in the case of continuing professional education related to job skills, where there is no time requirement.
If you’re wondering which of these two credits pertains to you or your dependent students, contact Taxation Solutions, Inc. today! One of the things we do is talk Cincinnati-area taxpayers through their tax returns, going over deductions, tax credits, and any other issues or concerns. We want you to be IRS compliant while also getting the best possible outcome for your financial situation. Give us a call to get answers to your questions.