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Reduce Taxes For Education Expenses
By cpa | March 17, 2008
College (or Higher) Education Expenses / Back to School
If you or your children are studying for college, graduate, or professional level education, then you might be able to utilize the following information to reduce your taxes.
- Hope Tax Credit: The first $1,000 of tuition and fees paid for higher education and half of the next $1,000 of tuition and fees paid, up to a maximum credit of $1,500 per student. You may claim a tax credit up to $1,500 for the first two years in college.
- Lifetime Learning Tax Credit: 20% of the first $10,000 of qualified education expenses. The maximum credit is $2,000. This credit applies to anyone taking post-secondary, vocational or graduate education courses
Income Limitation: Both credits are only available to income less than $53,000 for single taxpayers or $106,000 for married filing jointly taxpayers.
- Tuition and Fees Deduction: The deduction can be up to $4,000 for tuition and fees paid for higher education.
Income Limitation: The deduction is only available to income less than $80,000 for single taxpayers or $160,000 for married filing jointly taxpayers.
Note: You may not claim the tuition and fees deduction with Hope Tax Credit or Lifetime Learning Tax Credit for the same student.
Some states allow a tax credit for college tuition. For example,
Income Exceeds Limitation: If you improve your professional skills by attending courses that are required by your employer, but your income exceeds the limitation, you may deduct the education expenses as an employee business expense deduction on Schedule A. If you are a self-employed business owner, you may deduct the education expenses on Schedule C.
Topics: TAX |
March 17th, 2008 at 2:05 pm
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