Go to School!

Stephen Ganns, https://gannsblog.wordpress.com, discusses the tax benefits of college courses. The IRS offers three types of deductions and/or credits for people who take courses for various reasons, including to improve their skills or get a degree. The three different types of credits and/or deductions are:

  • The American Opportunity Credit
  • The Lifetime Learning Credit
  • Tuition and Fees deduction

All taxpayers can qualify for these deductions. However, the quagmire of rules and regulations to determine who gets to qualify which expenses for what is much too difficult and complex to cover in a reasonable amount of blog space.

This blog is not intended to educate all of my readers to become experts in education credits and deductions, bad enough I have to know it. This blog is intended to let you know that these credits exist and what they can do for you. Come to me or a good tax preparer and we’ll do the heavy lifting for you.

Here are the education benefits:

The American Opportunity Credit

The American Opportunity Credit is a wonderful credit. You can receive a $2,500 reduction in your taxes if you fit certain categories.

The Lifetime Learning Credit

The Lifetime Learning Credit is also another type of credit which is a little bit easier to qualify for. This credit maxes out at $2,000.

The Tuition and Fees Deduction

The tuition and fees deduction is a deduction of up to $4,000, which is not a credit. The amount that you save will depend on your tax rate, i.e. 25% tax rate, you would save $1,000.

The types of expenses that qualify for these credits range all the way from having to be an undergraduate student matriculated at an accredited university to simply taking courses to improve your life.  Again, as I said earlier, just know that when you go to get your taxes prepared, please tell your preparer if you had any education expenses during the year. He or she can navigate the road map of which is the best deduction and what kind of expenses qualify.

I really encourage people who have education expenses to seek out the advice of a professional. These benefits are too big to take a chance on missing. Though I am not against people doing their own taxes when they are simple, there is a great chance that you may lose some benefit by trying to navigate educational expenses without a professional. This part of the law is extremely difficult. If you have education expenses, have someone help you do your taxes. You won’t be sorry.

We would be happy to answer any questions you have regarding possible educational deductions.  Please give us a call or send us a message through the “Leave a Reply” box below.

Stephen J. Ganns

Stephen J. Ganns, CPA


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