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4 Tax Deductions for College Students

4 Tax Deductions for College Students

By on Nov 29, 2016 in Tax Tips | 0 comments

4-tax-deductions-for-college-studentsDid you know that as a student, you qualify for tax deductions and credits? If you’re supporting yourself, and no one claiming you on their taxes, then you might be in for a nice little tax break. And college students can use all the breaks they can get!

Financially independent students may be interested in deductions, but what they should also know is that they can take advantage of tax credits.

Credits

  1. American Opportunity Tax Credit

The American Opportunity Tax Credit (AOTC) is for students enrolled in the first 4 years of college. The most a student can get is $2,500. Anyone pursuing a degree from a recognized institution can qualify. The student must be enrolled at least part-time and not claim the former Hope credit or the AOTC in the last 4 years. The student cannot have a felony conviction within that academic year. In order to claim the full credit, you must have a household income of $80,000 or less if you’re single. If you’re married, then the household income must be less that $180,000. Learn more about the AOTC and the adjusted gross income required here.

  1. Lifetime Learning Credit

With this credit, students can take advantage of this for as long as they’re enrolled in a recognized and eligible college. This credit is worth $2,000. Students must also be enrolled for at least one semester at the beginning of the new tax year. The adjusted gross income needed to claim this credit is over $55,000, but less than $65,000 for single students. Married students can earn no more than $130,000 collectively. Find out more information about this Lifetime Learning Credit here.

Deductions

Whether it’s you, your spouse, or dependent enrolled in college, you may still be able to deduct a certain amount from your annual tax filing. The only stipulation is that you won’t be able to do this if you are filing married filing separately or if someone else is claiming that dependent on his or her taxes.

  1. Tuition and Fees

You can deduct a total amount of $4,000 on your annual taxes in tuition and fees. This deduction does not require you to fill out a Schedule A Form. If you’ve spent more than $2,000 on your education in out-of-pocket expenses, then it’s best that you take advantage of this deduction instead of any of the other educational credits.

  1. Student Loan Deduction

If you’ve taken out a loan, you have the opportunity to pay the interest on that loan while you’re still enrolled in school. If this is the case, you can write off the amount of taxes you paid that year on your annual filing. According to the IRS, you have to make between $80,000 if you’re single and no more than $160,000 for a joint return.

There are plenty of other deductions you can take advantage of as a student. Educational expenses like room and board, books, transportation and parking expenses all can be written off. Also, any work-related educational expenses can be written off if the company doesn’t reimburse you.

If you want to know more about these expenses, visit the IRS website or call Success Tax Relief for a free consultation at 877-825-1179. You can also contact us online.

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