Are you trying to find ways to save money on your college education? There are ways to do this through the tax system. The video gives great insight into the tuition tax credit system and how to use it.
Tax credits are dollar-for-dollar deductions related to the taxes that you are owed. College tax credits are based on expenses that are paid.
If you are to use them, you must keep receipts for everything you spend money on. The video discusses two main tax credit programs.
The American Opportunity Tax Credit is the most used scheme. It is capped based on income and can only be used for 4 years. To qualify, your family’s adjusted gross income must be less than $180,000. The maximum amount of credit you can claim with this plan is $2500, and you can receive up to $1000 in cash.
There is also the Lifetime Learning Tax Credit. To qualify, the adjusted gross income must be, at most, $69,000. You can claim up to $2000, which must be 20% of your total expenses. The greatest advantage is that there is no limit to the number of years you can claim it. Now you know how the college tuition tax credit works.