Fox Tax Tips: College Credits

Here's Fox Business Network's Gerri Willis.

It’s no wonder college students and their families are desperate for tax breaks, since education debts nationally tops out at $1.4 trillion.

The good news? Uncle Sam can help.

If you meet income thresholds, you can file for the American Opportunity Tax Credit, a $2,500 dollar-for-dollar reduction in your tax bill.

New this year, filers taking the credit will have to file a 1098T form to substantiate need.

There’s also the Lifetime Learning Credit of $2,000. Again, you must meet income limitations.

Interest on student loans can also be deducted up to $2,500.

“There’s a new thing that came about through the Path Act called the Lifetime Learning Credit. So, if you take a course at a community college or a college that will help you in your job-related skill, you can deduct up to $2,000 of the cost of that, of that course through your taxes. So, this is something very few people know about, but if you’re trying to do continuing education, this is a great way to have your tax burden and, essentially, that course paid for.” 

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