Back to School Tax Credits

Back to School Tax Credits

Is your child or someone you know going to college this Fall?  If so, you may receive some tax savings on your federal tax return.  There are two tax credits that you may qualify for on your 2016 individual income tax return: the American Opportunity Tax Credit (AOTC) or the Lifetime Learning Credit.  Both credits can reduce the tax you owe, and the AOTC may be partially refundable. To learn about the specifics for each of these credits please see link below. 

Only qualified expenses can be used to calculate the credit.  Qualified expenses are costs associated with tuition, fees and other related expenses, excluding living expenses or housing expenses.  To assist you in filing your 2016 tax return, your educational institution will send Form 1098-T by February 1, 2017 for tuition paid in 2016 . To claim the credit, this form must be submitted with your return and reported to the Internal Revenue Service (IRS).  Furthermore, educational credits are also subject to income limitations and may be reduced or eliminated.  Be sure to give our professionals a call if you have questions about qualifications. 

For more information regarding back to school tax credits, go to: https://www.irs.gov/uac/back-to-school-education-tax-credits

Article by: Jennifer Queen, Tax Manager

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