A tax credit is an amount that you're allowed to subtract from what you owe in taxes. When you pay college costs, you can subtract a certain amount from your tax bill later on. If your parents pay college expenses for you, they get the tax credit.
There are two different tuition tax credit programs. The amount or the credit varies and is subject to a number of rules, depending on which credit you use, what you use the money for, and what area of the country you live in. Your family may not claim more that one credit at a time.
American opportunity tax credit:
Families who owe very little tax or no tax (because their incomes are low) may be able to get some of the credit paid back to them directly. Also, the credit can be applied to course-related books and supplies, in addition to tuition and fees.
Lifetime learning credit:
The money claimed must have been used for tuition and fees. This credit is available to undergraduate or graduate programs and for courses (even a single course) to acquire or improve job skills.
If you haven't filed your taxes yet, these options might save you some money. In any event, definitely looking into.
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