{"id":2039,"date":"2023-10-14T05:28:57","date_gmt":"2023-10-14T09:28:57","guid":{"rendered":"https:\/\/www.saudercpa.com\/blog\/?p=2039"},"modified":"2023-10-13T11:38:41","modified_gmt":"2023-10-13T15:38:41","slug":"2023-tax-planning-higher-education-credits","status":"publish","type":"post","link":"https:\/\/www.saudercpa.com\/blog\/2023\/10\/14\/2023-tax-planning-higher-education-credits\/","title":{"rendered":"2023 Tax Planning: Higher Education Credits"},"content":{"rendered":"<p><em>Preface:\u00a0It&#8217;s what you learn after you know it all that counts. -John Wooden<\/em><\/p>\n<p class=\"cs4CB833D8\"><strong><span class=\"cs53810E33\">2023 Tax Planning: Higher Education Credits<\/span><\/strong><\/p>\n<p class=\"csD270A203\"><span class=\"cs79DA67E2\">With school back in session, parents and students should look into tax credits that can help with the cost of college education. Credits reduce the amount of tax someone owes on their tax return. If the credit reduces tax to less than zero, the taxpayer may receive a refund.<\/span><\/p>\n<p class=\"csD270A203\"><span class=\"cs79DA67E2\">There are two credits available to help taxpayers offset the costs of college education. The American opportunity tax credit (AOTC) and the lifetime learning credit (LLC) may reduce the amount of income tax owed. Taxpayers who pay for higher education can see these tax savings when they file their tax returns next year.<\/span><\/p>\n<p class=\"csD270A203\"><strong><span class=\"cs79DA67E2\">\u00a0<\/span><span class=\"cs79DA67E2\">The\u00a0<\/span><span class=\"cs296F1E46\">American opportunity tax credit<\/span><span class=\"cs79DA67E2\">\u00a0is:<\/span><\/strong><\/p>\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li class=\"cs53085235\"><span class=\"cs79DA67E2\">Worth a maximum benefit up to $2,500 per eligible student.<\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li class=\"cs53085235\"><span class=\"cs79DA67E2\">Only for the first four years at an eligible college or vocational school.<\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li class=\"cs53085235\"><span class=\"cs79DA67E2\">For students pursuing a degree or other recognized education credential.<\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li class=\"csD658B0BB\"><span class=\"cs79DA67E2\">Partially refundable. This means if the credit brings the amount of tax owed to zero, 40 percent of any remaining amount of the credit, up to $1,000, is refundable.<\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p class=\"csD270A203\"><strong><span class=\"cs79DA67E2\">The\u00a0<\/span><span class=\"cs296F1E46\">lifetime learning credit<\/span><span class=\"cs79DA67E2\">\u00a0is:<\/span><\/strong><\/p>\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li class=\"cs53085235\"><span class=\"cs79DA67E2\">Worth a maximum benefit up to $2,000 per tax return, per year, no matter how many students qualify.<\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li class=\"cs53085235\"><span class=\"cs79DA67E2\">Available for all years of postsecondary education and for courses to acquire or improve job skills.<\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li class=\"csD658B0BB\"><span class=\"cs79DA67E2\">Available for an unlimited number of tax years.<\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p class=\"csD270A203\"><span class=\"cs79DA67E2\">To be eligible to claim the American opportunity tax credit, or the lifetime learning credit, a taxpayer or a dependent must receive a Form 1098-T from an eligible educational institution. The credits are subject to income limits: to claim the full amount, income must be below $80,000 for single taxpayers ($160,000 married filing jointly). Taxpayers cannot claim either credit if income exceeds $90,000 ($180,000 married filing jointly).<\/span><\/p>\n<p class=\"csD270A203\"><span class=\"cs79DA67E2\">In general, qualified tuition and related expenses for the education tax credits include tuition and required fees for the enrollment or attendance at eligible post-secondary educational institutions (including colleges, universities and trade schools). The expenses paid during the tax year must be for: an academic period that begins in the same tax year or an academic period that begins in the first three months of the following tax year.<\/span><span class=\"cs4D4CCDF9\">\u00a0<\/span><span class=\"cs79DA67E2\">For the AOTC but not the LLC, qualified tuition and related expenses include amounts paid for books, supplies and equipment needed for a course of study.<\/span><\/p>\n<p class=\"csD270A203\"><span class=\"cs79DA67E2\">\u00a0<\/span><span class=\"cs79DA67E2\">The following expenses do not qualify for the AOTC or the LLC:<\/span><\/p>\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li class=\"cs53085235\"><span class=\"cs79DA67E2\">Room and board<\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li class=\"cs53085235\"><span class=\"cs79DA67E2\">Transportation<\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li class=\"cs53085235\"><span class=\"cs79DA67E2\">Insurance<\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li class=\"cs53085235\"><span class=\"cs79DA67E2\">Medical expenses<\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li class=\"cs53085235\"><span class=\"cs79DA67E2\">Student fees, unless required as a condition of enrollment or attendance<\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li class=\"cs53085235\"><span class=\"cs79DA67E2\">Expenses paid with tax-free educational assistance<\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li class=\"csD658B0BB\"><span class=\"cs79DA67E2\">Expenses used for any other tax deduction, credit or educational benefit<\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p class=\"csD270A203\"><span class=\"cs79DA67E2\">We wish you a successful school year. Please call our office if you have any questions related to education expenses and tax benefits.<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Preface:\u00a0It&#8217;s what you learn after you know it all that counts. -John Wooden 2023 Tax Planning: Higher Education Credits With school back in session, parents and students should look into tax credits that can help with the cost of college education. Credits reduce the amount of tax someone owes on their tax return. If the &hellip; <a href=\"https:\/\/www.saudercpa.com\/blog\/2023\/10\/14\/2023-tax-planning-higher-education-credits\/\" class=\"more-link\">Continue reading<span class=\"screen-reader-text\"> &#8220;2023 Tax Planning: Higher Education Credits&#8221;<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[1],"tags":[],"_links":{"self":[{"href":"https:\/\/www.saudercpa.com\/blog\/wp-json\/wp\/v2\/posts\/2039"}],"collection":[{"href":"https:\/\/www.saudercpa.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.saudercpa.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.saudercpa.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.saudercpa.com\/blog\/wp-json\/wp\/v2\/comments?post=2039"}],"version-history":[{"count":1,"href":"https:\/\/www.saudercpa.com\/blog\/wp-json\/wp\/v2\/posts\/2039\/revisions"}],"predecessor-version":[{"id":2040,"href":"https:\/\/www.saudercpa.com\/blog\/wp-json\/wp\/v2\/posts\/2039\/revisions\/2040"}],"wp:attachment":[{"href":"https:\/\/www.saudercpa.com\/blog\/wp-json\/wp\/v2\/media?parent=2039"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.saudercpa.com\/blog\/wp-json\/wp\/v2\/categories?post=2039"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.saudercpa.com\/blog\/wp-json\/wp\/v2\/tags?post=2039"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}