TStrive to understand the different types of financial assistance offered in United State When it comes to studying at university it can be a bit of a minefield, particularly in terms of educational tax credits for tuition and fee discounts.
If you find that you incurred educational expenses over the course of the school year, you may qualify for some assistance with obtaining a tax exemption or savings.
There are two different types of education tax credits you can claim — and American Opportunity Tax Credit (AOTC) and the Lifelong Learning Credit (LLC).
The AOTC It offers students a chance to get up to $2,500 to help cover educational expenses. The credit is 40 percent refundable, so it’s possible to still get a partial refund if you don’t owe any income tax.
with the AOTCNote that this must be claimed within a maximum of four tax years after completing your studies. In order to qualify for the credit, taxpayers need an adjusted adjusted gross income of less than $90,000, or $180,000 for married couples.
The LLC, meanwhile, is non-refundable and offers up to $2,000 per student. Unlike AOTC, there is no limit to the number of years you can claim.
This is aimed at high-paying taxpayers, so a single taxpayer needs an adjusted gross income of less than $64,000 and spouses with an adjusted gross income of less than $128,000.
Tuition fee deduction
Should you not be eligible for any of the AOTC or the LLCYou can save money by Tuition fee deduction. This will enable taxpayers to deduct up to $4,000 when it comes to eligible education expenses.
It is only possible to claim Tuition fee deduction You or your spouse, which means that a parent cannot claim it on behalf of their child.
This deduction helps reduce your taxable income rather than your tax liability, and this is available to single taxpayers with adjusted adjusted gross income under $80,000 and married taxpayers with adjusted adjusted gross income under $160,000.