Knowledge is power, but nowadays it costs a lot. Probably, you postpone improving your skills or getting new ones simply because you have no opportunity to pay for it. Tax education credits will rescue you! Covering education cost with smart tax deduction is real, and your dream job can be closer than you think.
Check your status before claiming
Naturally, only the eligible student can claim the credit.
Check your educational institution in the U.S. Federal Student Aid Code List to find out if your college, university, or trade school gives you a right to claim a credit.
Be careful! If you’re not eligible, you can be banned from claiming for years.
If you have a spouse or any other relative listed in a tax return who is an eligible student, there is also an opportunity for you to claim a credit for them.
Be ready to pay! Claiming a credit is possible only if you fully pay qualified education expenses.
Helpful education credits
Notice, you can choose only one option for claiming! Both credits cannot be given to the US citizen, evaluate all opportunities and choose wisely.
American Opportunity Tax Credit (AOTC)
Get a credit for education expenses that take place during the first four years of education. The maximum sum per year you can get is $2500. Claim the credit if you:
- Pursue a degree and enrolled half of any academic period (semesters, trimesters, etc.)
- Have no drug convictions during the tax years
- Have your first four years of education
- Have not claimed the credit during the last four tax years.
Lifetime Learning Credit (LLC)
With this credit, any eligible student can improve skills. It helps to cover costs for different types of education:
- Professional courses to increase qualification;
- Courses for acquiring new skills from scratch;
- Trade schools
- Undergraduate education, etc.
Enjoy the opportunities this credit gives, claim it as many years as you need.
Check your status before applying! spend only 10 minutes on the online interview to avoid illegal claiming LLC.
What’s next?
The first thing that should be done is requesting Form 1098-T from your college or university. This form will give you an idea about the amount you can claim. Fill Form 8863 to claim education credits, file it together with Form 1040 or Form 1040a and save a lot of money!
Stay alert while claiming!
Double-check all the forms, approve the information you have before filing. Ask for additional consultation with tax specialist if you are not confident. Keep all the copies and be ready to prove the amount of your credits. The errors in forms can be resulted in penalties and charges from IRS!
No worries if a claim was denied or reduced! Done everything right and got disallowance? Fill Form 8862 and file it together with Form 1040 or Form 1040a. If there were no mistakes made by you, a chance to get a credit is still high.
