Are you looking for ways to save cash for your college tuition? There are ways to do this through the tax system. This video provides a great review of the tuition credit system as well as its application.
Tax credits can be described as deductions in dollars related to the taxes that you are owed. Tax credits for college are calculated based upon expenses paid. If you plan to utilize the tax credit, maintain receipts for all the things that you buy. The video below outlines two important tax credits programs.
The American Opportunity Tax Credit is the most used scheme. You are able to use it for 4 years only and it is subject to income limitations. Family members must earn lesser adjusted gross income of $180,000 to be eligible. This plan allows you to receive up to $2500 credits and $1000 in cash.
There is also The Lifetime Learning Tax Credit. For you to qualify, your adjusted gross earnings must amount to not less than $69,000. You can claim up to $2000. The amount you claim must be equal to 20% of the total cost. The greatest advantage is that there’s no restriction on the number years that you are eligible to claim. Now you know how the college tuition tax credit functions.
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