Tax Tips Tuesday: Higher Education Tax Breaks
By The Tax Institute at H&R Block
A common inaccuracy that has taxpayers overpaying their taxes is not taking advantage of the higher education tax breaks they qualify to claim.
There are more than 18 million people in college, but only two-thirds are claiming one of the higher education tax breaks. These higher education tax breaks, such as the American Opportunity Credit and Lifetime Learning Credit, can help parents and students manage the costs of education and boost tax refunds.
Also overlooked is the tuition and fees deduction, which helps reduce taxable income by up to $4,000. This deduction was claimed by more than 2 million taxpayers for a combined savings of $4.36 billion in 2010, and it expired Dec. 31, 2013. It can still be claimed for tax year 2013, but it might not be available in the future, as is the case with some other popular tax breaks.
Higher education tax breaks can help parents manage college costs, but they are frequently overlooked. For more information about higher education tax breaks and other tax topics, contact a local H&R Block tax professional.