You are getting ready to prepare your taxes this year and if you are paying for college, too, you may qualify for additional tax breaks. If parents are helping with your college expenses they may also be able to qualify.
The American Opportunity Tax Credit
There is a $2,500 tax reduction in your federal income tax bill if your earnings are less than $80,000 for single filers and $160,000 for married couples. This break can be taken every year you are in college.
Lifetime Learning Credit
The credit you can have is 20% of your eligible school expenses up to a maximum of $2,000. The credit will be reduced for singles earning more than $52,000 and for married couples with more than $104,000 adjusted gross income. It is available for the first four years of college.
Break for repaying loans
For those repaying college loans, they can write off as much as $2,500 in interest costs. This write off decreases for those earning more than $60,000 when single or $120,000 when married.
The best course of action is to seek advice from a tax professional because there are different limitations and conditions for each one of these breaks.
You can read more about this at the Daily Finance.