More good news for those of us with College Students
The tax code gives many tax incentives for parents and students who are saving for, or already paying, higher education costs or are trying to re pay student loans.
There is a Hope and Lifetime Learning Credit for the qualified tuition and related expenses of the students in your family (i.e., you, your spouse, or an eligible dependent) who are enrolled in eligible educational institutions. Different rules apply to each credit. If you claim a Hope Scholarship Credit for a particular student, none of that student’s expenses for that year may be applied toward the Lifetime Learning Credit.
You may be able to claim a tuition deduction of up to $4,000 of qualified education expenses paid during the year for yourself, your spouse, or your dependent. You cannot claim this deduction if your filing status is married filing separately or if another person can claim an exemption for you as a dependent on his or her tax return. The qualified expenses must be for higher education.
You may be able to deduct interest you pay on a qualified student loan. If your student loan is canceled, you may not have to include the amount as income. The deduction is claimed as an adjustment to income so you do not need to itemize your deduction using schedule A form 1040.
The tax code has something for everyone!