Super important for parents! Know where the tax credits are to offset the cost of education!
If you paid college tuition last year, you may be eligible for one of two tax credits on your 2013 federal tax return.
The American Opportunity Credit was created under the American Recovery and Reinvestment Act of 2009 and extended through 2017 with the passage of the American Taxpayer Relief Act of 2012. It gives a tax credit for four years of undergraduate study of up to $2,500 a year. A portion (40 percent/$1,000) of the credit is refundable, which means the credit in excess of taxes due will be refunded.
The Lifetime Learning Credit is a nonrefundable credit of up to $2,000. Unlike the American Opportunity Credit, which may only be used up to four tax years per student, is not limited in the number of years it can be taken.
There are income limits that determine eligibility for these tax credits.
Who qualifies for the American…
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