Get federal income tax relief and take advantage of education-related tax credits and deductions. These benefits can significantly reduce your tax liabilities, by thousands of dollars in some cases.
Hope tax credit
The Hope tax credit could provide your family up to $1,800 ($3,600 if a student in a Midwestern disaster area) credit per eligible student.
See IRS Publication 970, "Hope Credit" section for more information.
Lifetime learning tax credit
For the tax year, you may be able to claim a lifetime learning credit of up to $2,000 ($4,000 for students in Midwestern disaster areas) for qualified education expenses paid for all eligible students. There is no limit on the number of years the lifetime learning credit can be claimed for each student.
See IRS Publication 970, "Lifetime Learning Credit" section for more information.
Tuition and fees deduction
You can reduce income subject to tax by up to $4,000 for tuition and related expenses. Qualifying expenses are the tuition and fees required for enrollment or attendance at an eligible college, university, or vocational school. You, your spouse, or your dependent must have incurred these expenses.
To claim this deduction, taxpayers must file federal tax Form 1040; you do not need to itemize deductions.
Student loan interest deduction
If you took out student loans, you may be able to deduct up to $2,500 in interest paid yearly. To qualify, you should have used proceeds from the loan toward qualified higher education expenses, including tuition, fees, room, board, supplies, and other related expenses by you, your spouse, or dependent.
To claim this deduction, taxpayers must file federal tax Form 1040 or 1040A; you do not need to itemize deductions.