How Can I get Tax Deductions and Credits When Paying for College?
One of the most frequently asked questions that College Coach experts are asked is, “Can I deduct the payments I make for my child’s college tuition expenses?” This relatively straightforward question does not have a straightforward answer, but with careful planning families can take advantage of tax breaks that are designed to help them pay for their family’s higher education expenses.
For most parents of traditional undergraduate students, the biggest available tax break is the American Opportunity Credit (AOC). Taxpayers who qualify for the AOC may receive a $2,500 credit if they pay $4,000 or more in tuition, required enrollment fees, and course materials that the student needs for a course of study. Credits are better than deductions: they reduce the family’s tax liability dollar for dollar!