Tax deductions and tax credits are another way educated consumers can help pay for college. These tax benefits have been created by Congress to help address college affordability. As tax deductions and credits are always changing, be sure to refer to the most up-to-date information provided by the IRS at www.IRS.gov under Publication 970.
Below is a chart which includes a brief description of the most used educational tax deductions and credit. These tax benefits can change year-to-year so refer to the most recent 970 publication when planning.
|Lifetime Learning Credit||Student Loan Interest Deduction||Tuition & Fees Deduction||American Opportunity Credit|
|Benefit||Can reduce amount of taxes to be paid||Can deduct interest paid||Can deduct expenses||Can reduce amount of taxes to be paid|
|Annual Limit||$2,000||$2,500 deduction||$4,000 deduction||$2,500 deduction per student|
|Education||Undergraduate & Graduate Including: courses to acquire or improve job skills||Undergraduate & Graduate||Undergraduate & Graduate||
|Income||$50-60,000 - single
$100-120,000 - joint
|$60-75,000 - single
$120-150,000 - joint
|$65-80,000 - single
$130-160,000 - joint
| $80-90,000 - single
$160-180,000 - joint
Note: If you paid $600 or more of interest on a qualified student loan during the year, you will receive a 1098-E form, from the financial institution or from a governmental agency (or any of its subsidiary agencies) detailing the interest you paid on your educational loan for the tax year. If you paid qualified education expenses (as determined by the IRS) such as tuition, fees etc. you will receive a 1098-T form from your educational institution detailing these expenses.
Loans and the AAA Student Lending Program offered through AAA Southern New England Bank. Rates and terms are subject to change or termination without notice. All loans are subject to satisfactory credit approval and Federal government eligibility requirements. Other loans and terms available.