All this back-to-school season excitement might make you want to consider furthering your own education, and the IRS might be able to help. Tax credits, deductions, and savings plans can help taxpayers with their expenses for higher education.
• Tax credits help with the cost of higher education by reducing the amount of income tax you may have to pay. The two tax credits available are the American Opportunity Tax Credit and the Lifetime Learning Credit.
• Some education savings plans allow your earnings to grow, tax free, until the money is taken out; some allow the deduction to be tax free; some do both.
• You may be able to deduct higher-education costs, such as tuition, student loan interest, and qualified education expenses, from your tax return.
If you’ve always dreamt about going back to school, whether to further your career or just learn something new, knowing your potential tax benefits may be able to save you money.
* This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax professional.
Tip adapted from IRS.gov