Tax Benefits with Student Loans
Tax Credits for Higher Education Expenses
Two tax credits help offset the costs (tuition, fees, books, supplies, equipment) of college or career school by reducing the amount of your income tax:
The American Opportunity Credit allows you to claim up to $2,500 per student per year for the first four years of school as the student works toward a degree or similar credential.
The Lifetime Learning Credit allows you to claim up to $2,000 per student per year for any college or career school tuition and fees, as well as for books, supplies, and equipment that were required for the course and had to be purchased from the school.
Even if you normally wouldn’t file a tax return because of your income level, be sure to do so! If you don’t, you’ll miss out on tax credits that would put money in your pocket.