Tax Incentives for Higher Education
The tax code provides a variety of tax incentives for families who are paying higher education costs or are repaying student loans. You may be able to claim an American Opportunity Credit (formerly called the Hope Credit) or Lifetime Learning Credit for the qualified tuition and related expenses of the students in your family (i.e. you, your spouse, or dependent) who are enrolled in eligible educational institutions. Different rules apply to each credit and the ability to claim the credit phases out at higher income levels.
If you don’t qualify for the credit, you may be able to claim the “tuition & fees deduction” for qualified educational expenses. You cannot claim this deduction if your filing status is married filing separately or if another person can claim an exemption for you as a dependent on his or her tax return. This deduction phases out at higher income levels.
You may be able to deduct interest you pay on a qualified student loan. The deduction is claimed as an adjustment to income so you do not have to itemize your deductions on Schedule A Form 1040. However, this deduction is also phased out at higher income levels.Tags: American Opportunity Credit, california, CPA orange county, form 1040, hope credit, irvine, itemized deductions, Lifetime Learning Credit, Orange County Accounting, Orange County CPA Firms, redwitz, Redwitz CPA Firm, redwitz inc., Redwitz Individual Tax Planning, Redwitz Internationl Tax Services, Redwitz Irvine, Redwitz Tax Prepraration, Redwitz tax services, tax forms, www.redwitz.com