August 18, 2017|
Good afternoon everyone, my name is Brian Stetina and I am a partner here at Faw Casson. I am also the Director of Tax Services. I’ve got a couple little friends here with today to talk to you a little bit about education tax credits.
If you are going back to school, or you have a child or dependent that is going back to school, you may qualify for two really great tax credits just for paying for their tuition.
The first one is the American Opportunity Tax Credit which is up to $2500. It is calculated primarily on the cost. $1500 of it is against your tax and $1000 can be a refundable credit, which is great - if you have no tax, you might get money back.
Then there is the Lifetime Learning Credit. If you go back to school at any time you still can qualify for about a $2000 tax credit. The American Opportunity Credit is the first four years of school and the Lifetime Learning Credit is anytime you go back and take higher education classes.
The biggest thing to remember is that these do phase out at some point in time depending on your income. The higher your income becomes, the closer you may come to phasing out. For the most part it is a pretty high phase out so you may get these credits.
There is also a tuition deduction of $4000, however tax credits are much better so typically you won’t see them being applied. These are just some things that you want to be thinking about as you are paying your tuition and preparing your taxes.
If you have any questions about these education credits feel free to give us a call here at Faw Casson and we can help you prepare and calculate these credits and get them on your tax return correctly. If you would like to adopt any one of these two sweethearts please call Doggone Happy Animal Rescue and they will be happy to help you out.