Tax Credits For Students Earning A Higher Education-vy canis majoris

College-University Many students are qualified to earn tax credits to help make up for the amount of tuition they pay for their education. A tax credit is a direct reduction of a persons tax liability. It reduces the actual amount of taxes that must be paid. There are three tax credit opportunities available for students to help offset their costs; American opportunity tax credit, the Hope credit and the lifetime learning credit. With the American opportunity tax credit which began in 2009, students are allowed to earn a credit up to $2,500 for the tax year. It can be claimed by the taxpayer for four academic years of the student acquiring a degree or other recognized education criteria. This tax credit is 40% refundable meaning that if the refunded credit is more than your taxes; the rest goes to you. To qualify for this tax credit, you must have paid qualified education expenses for yourself, a spouse or dependants for the tax year. You may also qualify for the American opportunity tax credit if you have taken a loan out to help with the payment. Qualified education expenses include payment for an academic period at an accredited institution which also includes books, equipment, supplies and student activity fees. The Hope credit applies to college students in their first two years of earning their degree or other recognized education credential. Most taxpayers credit replaced with Hope credit with the American opportunity tax credit. With the Hope credit, you can earn up to $1,800 dollars or $3,600 if you are a student in the Midwestern disaster area. The amount of the tax credit is reduced the higher your annual in.e is. Unlike the American opportunity tax credit and the Hope credit, you are not limited to the number of years you are allowed to claim the credit. It is based off of your modified adjusted gross in.e. The Lifetime Learning credit may be claimed for qualifying courses if your modified adjusted gross in.e is $50,000 or less ($100,000 if married). You may be able to claim up to $2,000 a tax year or $4,000 for students in the Midwestern disaster area if qualified. A student does not need to be pursuing a degree, as long as the student is enrolled in courses at an accredited education institution, even if it to acquire or enhance skills. Students are allowed to receive only one of these tax credits. If as a taxpayer, you are paying for more than one student, you may only choose one credit per tax year to be applied to all of the students you are paying for. About the Author: 相关的主题文章: