Tax credits to help lessen the burden of education costs had been made available through the American Opportunity Credit and Lifetime Learning Credit, as these forms of educational credits were set in place to help more parents and students when it comes to the overall financial impacts that college tuition costs will have in their personal financial life. Understandably, not everyone has been able to benefit from these particular credits, but as the tax season nears its end, more individuals are being prompted to explore a variety of credits, and more men and women who either may be in college or have children attending a university, these credits are simply one area that may need to be considered when filing tax returns.
The American Opportunity Tax credit can be made available for qualifying taxpayers and could bring up to $2500 per student based on 40% of tuition and fees that must be met by these individuals. Also, one of the popular aspects of this particular credit is the fact that it also will cover costs related to books or other materials, as simply purchasing textbooks in college in and of itself can be a quite costly expense that could drain the funds of most traditional students or parents.
The Lifetime Learning Credit has also been mentioned as this particular education credit, according to the IRS website, “can help pay for undergraduate, graduate and professional degree courses – including courses to improve job skills – regardless of the number of years in the program.”
During a time where many parents are finding financial difficulties have arisen in their life and some students may be seeing the opportunities for free financial assistance to decrease due to cutbacks in budgets or the simple inability to qualify for certain scholarships and grants, these tax credits may be helpful for those who are filing a tax return this year but have also had to meet costs related to pursuing their education. Understandably, there are some men and women who may not see a significant advantage from these tax credits, but many officials are at least prompting students and parents to look into these credits and how they may be applicable for their personal financial situation, even if college costs are in such excess that these credits will, again, do little to help.
It’s hoped that these tax credits will be advantageous for many men and women attending a college or university, but there are also other changes like enhanced benefits in college savings accounts and further reductions that may simply be taken due to tuition and fees that were met. Again, these options may not be available to every student, but as the maximum amount for the American Opportunity is $2500 per student, the Lifetime Learning option may qualify taxpayers for a $2000-$4000 credit, and students who are able to simply deduct tuition costs may receive up to $4000 for their deduction, so these amounts could be significant in certain cases and should not be overlooked by taxpayers.