College is more expensive than ever, but the Education Tax Credit is available to help cut down on educational expenses. Taxpayers or dependents who would like to save more on their tax bills in 2018 will find a new post by the National Tax Report on the education tax credit insightful. The blog post reveals the two separate routes to obtaining the education tax credits and student tax deductions, their benefits and all they need to know about qualifying for them.
There are two types of education tax credits – the American Opportunity Tax Credit and the Lifetime Learning Credit.
The American Opportunity Credit can wipe as much as $2,500 off taxes in education expenses. The credit covers everything from tuition fees to textbooks and $1,000 of the credit is fully refundable. To qualify for the American Opportunity Tax Credit, the taxpayer must be;
– Enrolled at a school that is part of the Federal Student Aid Program
– Must at the very least be a part-time student.
– Cannot have any felony drug convictions.
The Lifetime Learning Tax Credit is the other education tax credit and it is more accessible. It is a non-refundable credit but anyone who attends at least one course per year at a school enrolled in the Federal Student Aid Program is eligible for it. The tax credit covers tuition and supplies (purchased from the school) and has a maximum value of $2,000.
Taxpayers can easily determine how much they are entitled to by checking out the education tax credit and deduction calculator. Just by answering some basic questions, they will get an accurate idea of how much can be wiped off their tax bill.
To claim the education tax credit, taxpayers will need to file IRS Form 8863. The form is available through software like TurboTax online, which will automatically fill them out and submit it along their tax return using the information that they provide. Also, by using TurboTax taxpayers can get an accurate estimation of how much is owed the IRS in taxes this year, or if they are lucky enough to be entitled to a tax refund.
For more information about the education Tax credit, please read the original post on National Tax Report here, https://nationaltaxreports.com/what-is-an-education-tax-credit/