Writing Off College Expenses
College students can maximize their refund by writing off education-related expenses. Though the tax deadline may be months away, it’s worthwhile saving your receipts throughout the year. We suggest keeping all your receipts in a specific folder, or even electronically on your computer.
Education credits that are available include two non-refundable credits, including The American Opportunity Tax Credit and The Lifetime Learning Credit. To claim either credit you will need to provide information from Form 1098-T which should be mailed to you by the educational institution.
What is a non-refundable credit?
A non-refundable credit helps reduce the amount of taxes owed, and puts any remaining back through your refund.
The American opportunity tax credit is:
- Worth a maximum benefit of up to $2,500 per eligible student.
- Only for the first four years at an eligible college or vocational school.
- For students pursuing a degree or other recognized education credential.
- Partially refundable. People could get up to $1,000 back.
The lifetime learning credit is:
- Worth a maximum benefit of up to $2,000 per tax return, per year, no matter how many students qualify.
- Available for all years of postsecondary education and for courses to acquire or improve job skills.
- Available for an unlimited number of tax years.
What types of documentation do I need to get these tax credits?
- Tuition and Fees: You will receive a 1098-T from your educational institution. It will show the amount of tuition you paid, tuition-related expenses, and any grants or scholarships applied.
- Book, Supplies, and Equipment: This can include printers, laptops or educational materials required for school related activities. Keep receipts for all your purchases.
- Student Loan Interest: If you paid over $600 in interest for student loans, your lender should send you a form letting you know how much interest you’ve paid.
- Scholarships and Grants: Some scholarships are tax-free, depending on the types of expenses they cover. You can find more information here. To determine whether the educational assistance you received is taxable, click here.