Save Money While in School
To ease the financial burden of pricey textbooks and record-high tuition, the federal government provides several tax credits to college students and their families. You may be able to save thousands of dollars this year, just by proving you're a student at an eligible school.
If you're attending an accredited university, your school will send you a 1098-T form at the beginning of each year. This form includes important tax information about your education-related expenses. Once you receive this information, you will be able to file for tax deductions.
The Lifetime Learning Tax Credit is available to students who take at least one class from an accredited school. Qualifying students can get credit for 20% of the first $10,000 they spend on educational expenses, with a maximum credit of $2,000. To be eligible, single filers must have an adjusted gross income of less than $52,000 and joint filers must make less than $105,000.
Learn more about Lifetime Learning Tax Credits
The Hope Scholarship Tax Credit is offered to students who are enrolled in college at least half-time and are working on their first two years of undergraduate study. Filers must meet the same income requirements as the Lifetime Credit.
The Hope Scholarship is a tax credit, not a scholarship. Tax credits are subtracted directly from the tax you owe, instead of being subtracted from taxable income like a tax deduction. A family must file a federal tax return and owe taxes to get this tax credit. A family cannot get a refund for the Hope credit if it does not pay taxes.
For the 2006 tax year, a family may claim a tax credit up to $1,650 for each eligible dependent for up to two tax years (100% of the first $1,100 and 50% of the second $1,100 paid for qualified expenses). Learn more about Hope Scholarship Tax Credits
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