Most colleges and universities will be back in session this month which reminds us to think about the possible tax deductions and credits available for education expenses. There are now two main credits available, the American Opportunity Tax Credit (AOTC) and Lifetime Learning Credit (LLC). The maximum credit or benefit for these is $2,500 (AOTC) and $2,000 (LLC).
Unfortunately the deduction for Tuition and Fees expired at the end of 2013 and is no longer available. However the AOTC and LLC are very beneficial credits that should be utilized. The AOTC is limited to 4 tax years per eligible student however the LLC does not have a limit on the numbers of years the credit may be claimed. The LLC is also more flexibility regarding the type of expenses which can be counted as eligible. The LLC eligible expenses do not have to be related to pursuing a post-secondary degree. Visit the IRS Tax Benefits for Education: Information Center for more information on these two deductions at http://www.irs.gov/uac/Tax-Benefits-for-Education:-Information-Center
posted by Myron Fisher, CPA