Liberty Tax Service: Education Credits

David Merrill was back again with even more advice on understanding taxes. Today, he talked about education credits and what you can do to see a larger refund this season.

  1. American Opportunity Credit – Must be within first 4 years of higher education to qualify.  Maximum credit of $2,500 per qualifying student.  Must be enrolled at least half time for at least one academic period out of the year.  Phases out if MAGI is over $80,000 but less than $90,000 for single filers and over $160,000 but less than $180,000 for MFJ taxpayers.  You cannot claim the credit if your modified adjusted gross income is over $90,000 for single filers and $180,000 for married filing joint filers.
  2. Lifetime Learning Credit – Credit up to $2,000.  Do not need to enrolled at least half-time (could’ve just taken 1 class).  $65,000 income limitation for Single filers and $130,000 income limitation for Married Joint filers.
  3. Tuition and Fees Deduction –  Up to $4,000 deduction (not credit).  $80,000 income limit for Single filers and $160,000 limit for Married Joint filers.
  4. Student Loan Interest Deduction – Up to a $2,500 deduction.  $80,000 income limit for Single filers and $160,000 limit for Married Joint filers.

To learn more, visit their website or call 717-243-3278.

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