Writing Off College Expenses

College students can maximize their refund by writing off education-related expenses. Though the tax deadline may be months away, it’s worthwhile saving your receipts throughout the year. We suggest keeping all your receipts in a specific folder, or even electronically on your computer.

Education credits that are available include two non-refundable credits, including The American Opportunity Tax Credit and The Lifetime Learning Credit. To claim either credit you will need to provide information from Form 1098-T which should be mailed to you by the educational institution, or have statements from the educational institution.

What is a non-refundable credit?
A non-refundable credit helps reduce the amount of taxes owed, and puts any remaining back through your refund.

The American opportunity tax credit is:

• Worth a maximum benefit of up to $2,500 per eligible student.
• Only for the first four years at an eligible college or vocational school.
• For students pursuing a degree or other recognized education credential.
• Partially refundable. People could get up to $1,000 back.

The lifetime learning credit is:

• Worth a maximum benefit of up to $2,000 per tax return, per year, no matter how many students qualify.
• Available for all years of postsecondary education and for courses to acquire or improve job skills.
• Available for an unlimited number of tax years.

For more information about these two tax credits, visit the IRS website. To determine if you’re eligible, click here.

What types of documentation do I need to get these tax credits?

• Tuition and Fees: You will receive a 1098-T from your educational institution. It will show the amount of tuition you paid, tuition-related expenses, and any grants or scholarships applied.
• Book, Supplies, and Equipment: This can include printers, laptops or educational materials required for school related activities. Keep receipts for all your purchases.
• Student Loan Interest: If you paid over $600 in interest for student loans, your lender should send you a form letting you know how much interest you’ve paid.
• Scholarships and Grants: Some scholarships are tax-free, depending on the types of expenses they cover. You can find more information here. To determine whether the educational assistance you received is taxable, click here.