You or your dependent(s) may be able to benefit from one or more the many federal tax incentives available to help reduce the costs of higher education. These incentives offer tax breaks for current educational expenses as well as tax-advantaged savings for future educational expenses.
The federal tax incentives for education include the American Opportunity and Lifetime learning credits, the student loan interest deduction, Coverdell education savings accounts, and others. They have very different criteria, but one or more could help you to maximize your tax savings. The most beneficial options will depend on your current and anticipated expenditures for higher education.
Even if you or a dependent is not currently enrolled in a post-secondary school, it’s important to start planning for that day. Some of the education tax breaks, such as Coverdell ESAs and 529 plans, allow you to save money today for future education expenses. With the costs of post-secondary education going up every year, the sooner you start saving, the easier it will be to handle those costs.
The rules for the various credits, including who can claim them and for what types of expenses they can be claimed, are very complex. Because they are so complex, many people either overlook them or are afraid to claim them. That is where we can help.
We would be happy to sit down at our firm, review your most recent tax return, and identify which, if any, of the education tax breaks you qualify for. Contact us at 724-654-8970 to schedule an appointment.
