According to IRS Form 970, eligibility requirements for the Hope Credit and the Lifetime Learning Credit include:
Qualified expenses are:
Students convicted of a drug-related felony are not eligible for the Hope Credit but still qualify for the Lifetime Learning Credit. Also, the Lifetime Learning Credit can be used for all years of education, but the Hope Credit is only available for the first two years of post-secondary education.
No, the IRS does not send you a check for a tax credits that reduce your owed tax below $0.
If you are married and both you and your spouse are in school, each person can choose their tax credit. This means that married couples can qualify for up to $4,000 in tax credits reducing the burden of tuition significantly.
Tax credits are more beneficial than tax deductions. Tax deductions reduce your taxable income and tax credits actually reduce your taxes. For example, a $2,000 tax deduction takes $2,000 off of your income, saving you a couple hundred dollars in taxes but a $2,000 tax credit saves you the full $2,000.
No, the IRS does not allow you to take all deductions so choose the best tax advantage for your family.
Income restrictions often change, so check the restrictions every year. If you make more than $53,000 as an individual or $107,000 for a joint return, you are not eligible for credit and deduction options. For more detailed information about tax benefits of higher education, visit the IRS website.
ADVERTISEMENT |
|
Latest College & Financial Aid NewsSing For Your... Scholarships?February 1, 2023 by Kevin Ladd It’s February and we have a number of scholarships you can win this month that are based on your love for and performance of music of all kinds. Instrumental Scholarships, Vocal Scholarships, Theater Scholarships, to name just a few. Have you seen that Oscar-Nominated movie about Elvis Presley? Naturally, there are a number of related scholarships and one of them is listed below, worth up to $5,000 and due this Friday. [...] Take Me Out to the... Rodeo?January 27, 2023 by Kevin Ladd That’s right, if you live in one of 68 Texas counties and are graduating high school this year, you qualify for a $20,000 scholarship over four years of college. You still have time to complete the profile and upload the necessary documents online. Make sure your FAFSA has been completed and review all the other eligibility requirements as well. You could be one of the 79 students awarded this scholarship and take a huge chunk out of your tuition each of the next four years at any accredited, not-for-profit Texas college or university. [...] Fidelity Investments Will Commit $250 Million to EducationJanuary 18, 2023 by Kevin Ladd The new Invest in My Education program has been created to help provide access to education as well as ongoing support to the underserved Black and Latino community. [...] |