IRS Summertime Tax Tip 2008-16
It is Back-to-School time and maybe time for a tax break, too. Education credits can help lower your tax bill for 2008.
The Hope Credit or the Lifetime Learning Credit may help offset the cost of higher education for you, your spouse and your dependents.
The amount of these credits is based on the qualified education expenses, such as college or vocational school tuition and enrollment fees, that you paid during the year and may be limited by your modified adjusted gross income. Room and board, insurance or personal living expenses are not considered qualified education expenses.
The Hope Credit, which is up to a $1,800 tax credit per student per year, is available for only the first two years of college or vocational school.
The Lifetime Learning Credit, which is up to a $2,000 tax credit per tax return, applies to undergraduate, graduate and professional degree courses and there is no limit to the number of years you can take this credit.
Are you paying Student Loan interest? You may be able to deduct up to $2,500 from your income per tax return. Student Loan interest may be deducted even while your student is in school if you are paying the interest immediately rather than deferring the payments.
You cannot claim the Hope Credit and the Lifetime Learning Credit for the same student in the same year. You will want to choose the credit that provides the greatest benefit. However, you can claim the Student Interest Loan deduction and one of the credits simultaneously.
Additional information on the Hope and Lifetime Learning Credits and Student Loan Interest Deduction is available in Publication 970, Tax Benefits for Education, found on the IRS Web site at IRS.gov or by calling 800-TAX-FORM (800-829-3676).
Remember that for the genuine IRS Web site be sure to use .gov. Don't be confused by internet sites that end in .com, .net, .org or other designations instead of .gov. The address of the official IRS governmental Web site is www.irs.gov.
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