As schools get back in session, it’s a good time to check the education breaks for which you might qualify.
First, there’s the “American Opportunity Tax Credit” (formerly called the Hope credit) for a percentage of qualified expenses paid during the first four years of higher education.
Second, the lifetime learning credit allows a deduction for a percentage of qualified expenses paid for any year the American Opportunity credit isn’t claimed. This credit even applies to job related classes.
Third, there’s the above-the-line deduction for qualified higher education expenses paid for yourself, your spouse, or a dependent. The deduction is $4,000 for single filers with adjusted gross income (AGI) of $65,000 or less and joint filers with an AGI of $130,000 or less. It drops to $2,000 for an AGI up to $80,000 for single filers and $160,000 for joint filers. No deduction is allowed over these thresholds.
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