When filing your yearly income tax return, it’s important to know that there are certain tax credits and deductions that can help students and parents with expenses for higher education.
An education credit reduces the amount of tax owed on your tax return. There are two main types of education credits available to students, the American Opportunity tax credit and the Lifetime Learning Credit.
There are additional rules to each of these credits, but you must meet all three of the following criteria to qualify:
- You, your dependent or a third party pays qualified education expenses for higher education.
- An eligible student must be enrolled at an eligible educational institution.
- The eligible student is yourself, your spouse or a dependent you list on your tax return.
You may be able to take qualified deductions on education expenses that you paid during the year for yourself, your spouse or your dependent. The most common are the Tuition and Fees deduction, the Student Loan Interest deduction, a Qualified Student Loan and Qualified Education Expenses. You can view the full list of deductions and information on the IRS website.