Tax Tip: Taking School Credits Can Earn Tax Credits
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Barry Austin Photography/Thinkstock(NEW YORK) — Going to school usually pays off when you graduate — and when you’re doing your taxes.
“If you, your spouse, or your dependents are going to school, attending a post secondary education, first four years of post secondary education, you can take a tax credit of up to $2,500 based on the tuition, required fees and books,” says Eric Smith of the Internal Revenue Service.
That’s a straight $2,500 credit, meaning a big tax savings. It’s called the American Opportunity Tax Credit, and Smith says you can take some of the benefit even if you don’t owe any taxes this year.
“You can actually get a credit of up to $1,000 and get a refund based on that for going to school at least half time at a community college, four year college [or] trade school,” he says.
Some things that don’t apply include room and board, and medical and transportation expenses.
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