Education Tax Credits and Deductions: The American Opportunity Credit
Your Tax Savings = up to $2,500 annually per student
Worth up to $2,500 per year per student, the American Opportunity Credit is available to those students in their first four years of seeking a degree at an undergraduate college or university or pursuing a certificate at a trade or technical school. Qualified expenses include tuition, fees and course materials including equipment and supplies needed for classes (computers, iPads). While most taxpayers will qualify for this valuable credit, joint filers who earn more than $160,000 and single filers (head of household too) who make more than $80,000 are not eligible for this credit.
Note that part-time students who take longer than four years to finish a degree or certificate are eligible for this credit for the entire duration of their studies. How big is this? Parents that are putting two children through college at the can save $20,000.
Stuart Steinberg, CPA, MBA has owned a strategic tax planning practice on the North Shore for 23 years. Please feel free to contact him anytime and let Erock Tax take care of you!