Seems like it’s almost always tax time…
April 15th is always right around the corner. As you are preparing your return or having a CPA prepare your return, do not forget to take advantage of the Education Tax Credits available which can help offset the cost of your student’s education).
Two Credits Available
There are two tax credits available to take, The American Opportunity Tax Credit and Lifetime Learning Credit. The AOTC (American Opportunity Tax Credit) was extended through December 31, 2017. It now includes required course materials (think books, supplies, equipment) in addition to tuition and required fees (local, technology – you know, all those fees not included in tuition). The AOTC allows credit to be claimed for four post-secondary education years instead of two.
Those eligible will qualify for the maximum annual credit of $2,500 per student for which $1,000 is refundable for the American Opportunity Tax Credit. That means if you owe nothing, you get it back. A taxpayer whose gross income is greater than $90K ($180K filing joint) cannot claim the credit.
The Lifetime Learning Credit is $2,000 per year per taxpayer, for any post-high school education (including graduate-level courses and courses to acquire or improve job skills at an eligible educational institution. The Lifetime Learning Credit is nonrefundable;i.e. it can reduce regular income taxes to zero but can’t result in the receipt of a refund.
For the Lifetime Learning Credit, a taxpayer whose gross income is greater than $57K ($114 filing joint) cannot claim the credit.
Some, or all, of these expenses will be recorded on Form 1098-T Tuition statement. Your student can obtain this form by logging into their student portal. Keep in mind that the required books, supplies and equipment and the local fees will not be on the 1098-T statement so make certain you take that into account.
The Form 1098-T should be available online around January 25th, 2018 in paperless form and received by mail by January 31, 2018.
Make sure you take your allowable credits and consult with a professional or click here for further clarification.
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