Everyone loves to save on income taxes. One way to help pay for college expenses is to leverage tax incentives, like tax deductions and credits for college expenses. The tax laws change every few years, with new college tax credit and deductions, and incentives to save for college.
Don't forget to claim your student tax credit!
Students may claim this credit if you are over age 24 as long as you meet the other requirements, e.g. are not claimed as a dependent on someone else return, are attending a degree program half-time or more, and have not already completed four years of college. If you don't meet these criteria, you will probably be eligible for the Lifetime Learning Credit (see below).The American Opportunity credit is phased out for single taxpayers with incomes between $80,000 and $90,000, or ($160,000 to $180,000 for married joint filers).
You must be attending a degree program at least half time during your first four years of college.
When does the American Opportunity Tax Credit expire? The American Opportunity Credit started in 2009 and has been extended to include tax year 2017.
The Tax Cuts and Jobs Act (TCJA), signed by President Trump at the end of 2017, did not change the American Opportunity Tax Credit for 2018 and forward.
In 2016, the Lifetime Learning Credit is phased out for single taxpayers with incomes between $55,000 and $65,000, or ($110,000 to $130,000 for married taxpayers filing jointly).
Unlike the American Opportunity Tax Credit, this Lifetime Learning Credit does not require the student to be studying toward a degree, enrolled at least half-time, or limit on number of years it may be taken.
The Tax Cuts and Jobs Act (TCJA), signed by President Trump at the end of 2017, did not change the Lifetime Learning Credit for 2018 and forward.
In 2016, this benefit allows college Tuition and Fees to be deducted even if you did not itemize your deductions, up to $4,000 of college tuition and college expenses for you, your spouse or dependents.
In 2016, the tuition and fees tax deduction maximum is $4000 for modified adjusted gross income less than $65,000 (or MAGI $130,000 joint filers). Tax deductions are limited to $2,000 for single taxpayers with modified adjusted gross incomes between $65,000 and $80,000, or ($130,000 to $160,000 for married taxpayers filing jointly).