Tax Credits & Deductions for Education

The IRS reminds students or parents of students paying for tuition and other fees to keep good receipts and be aware of some of the tax benefits to help offset those costs.  Typically these benefits apply to you the taxpayer, your spouse or any dependent you can claim as an exemption on your tax return.  The professionals at Loggins & Associates can help you determine which educational credit or deduction will work best for your individual situation.  Take a look at this list and give us a call today!


  1. American Opportunity Credit – This credit, originally created under the American Recovery and Reinvestment Act, has been extended for an additional two years – 2011 and 2012.  The credit can be up to $2,500 per eligible student and is available for the first four years of post secondary education.  Forty percent (40%) of this credit is refundable, which means that you may be able to receive up to $1,000 even if you owe no taxes.  Qualified expenses include tuition and fees, course related books, supplies and equipment.  The full credit is generally available to eligible taxpayers whose modified adjusted gross income is below $80,000 ($160,000 for married couples filing a joint return). 
  2. Lifetime Learning Credit – In 2011, you may be able to claim a Lifetime Learning Credit of up to $2,000 for qualified education expenses paid for a student enrolled in eligible educational institutions.  There is no limit on the number of years you can claim the Lifetime Learning Credit for an eligible student, but to claim the credit, your modified adjusted gross income must be below $60,000 ($120,000 if married filing jointly).
  3. Tuition and Fees Deduction – This deduction can reduce the amount of your income subject to tax by up to $4,000 for 2011 even if you do not itemize your deductions.  Generally, you can claim the tuition and fees deduction for qualified higher education expenses for an eligible student if your modified adjusted gross income is below $80,000 ($160,000 if married filing jointly).
  4. Student Loan Interest Deduction – Generally, any personal interest you pay, other than certain mortgage interest, is not deductible.  However, if your modified adjusted gross income is less than $75,000 ($150,000 for filing a joint return), you may be able to deduct interest paid on a student loan used for higher education during the year.  It can reduce the amount of your income subject to tax by up to $2,500, even if you don’t itemize deductions.

For each student, you can choose to claim only one of the credits in a single tax year.  However, if you pay college expenses for two or more students in the same year, you can choose to take credits on a per-student, per-year basis.  For example, you could claim the American Opportunity Credit on your sophomore daughter, and the Lifetime Learning Credit on your senior son.  You also cannot claim the tuition and fees deduction for the same student in the same year that you claim a Credit (American Opportunity Credit or Lifetime Learning Credit).  You must choose to either take the credit or the deduction, and should consider which is more beneficial for you.

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