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Two Tax Credits Help Pay Higher Education Costs

posted Mar 26, 2014, 10:32 PM by Zaher Fallahi

Did you, your spouse or your dependent take higher education classes last year? If so, you may be able to claim the American Opportunity Credit or the Lifetime Learning Credit to help cover the costs. Here are some facts from the IRS about these important credits.

 

The American Opportunity Credit is:

Worth up to $2,500 per eligible student.

Only available for the first four years at an eligible college or vocational school.

Subtracted from your taxes but can also give you a refund of up to $1,000 if it’s more than your taxes. For students earning a degree or other recognized credential.

For students going to school at least half-time for at least one academic period that started during the tax year. For the cost of tuition, books and required fees and supplies.

 

The Lifetime Learning Credit is:

Limited to $2,000 per tax return, per year, no matter how many students qualify. For all years of higher education, including classes for learning or improving job skills.

Limited to the amount of your taxes. For the cost of tuition and required fees, plus books, supplies and equipment you must buy from the school.

 

For assistance with your tax preparation, tax planning, accounting, payroll processing, and the IRS representation including disclosure of your undeclared foreign bank accounts, please contact Zaher Fallahi, CPA, Tax Attorney, at (310) 719-1040 (Los Angeles) or (714) 546-4272 (Orange County), or e-mail to taxattorney@zfcpa.com
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