Did you know you could get tax credit for up to $2500 even if you took only one class in 2013?!
How about a refund check for up to 40% of your tuition?! Are you out of school and paying off student loans? You can deduct student loan interest, too! If you’re a student or a parent who will be claiming a student as a dependent this tax season, there are a several tax credits and refunds that you should know about.
The 4-year option
The American Opportunity and Lifetime Learning Credit is awarded to the taxpayer on a dollar-by-dollar basis for up to $4,500 on qualifying expenses including: books, tuition, fees and other school supplies. In order to qualify you must be working toward a degree, and the American Opportunity and Lifetime Learning Credit can only be claimed for the first four years that you’re in school.
$2,000 every year, for life
The Lifetime Learning Tax Credit is also available to students who have attended one course for up to $2,000. It is paid directly to the school and can be claimed every year, no matter how many years you are in school.
Tuition as a business expense
Tuition and fees can also be deducted as a reduction to your income as a qualified business expense, for up to $4000 even without filing a Schedule A (Form 1040) for itemized deductions. This is a great option if you do not qualify for either the Lifetime Learning Tax Credit or the American Opportunity and Lifetime Learning Credit.
Student loan interest
You can deduct up to $2500 in student loan interest paid in the 2013 tax year. You do not need to file a Schedule A (Form 1040) if you paid less than $600 or more of interest on a qualified student loan during the year. Your student loan company should submit to you a Form 1098-E (PDF), Student Loan Interest Statement by law. It is usually available online under tax documents.