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  • 4m.

    Tax Benefits For College Students

    There are quite a few tax deductions and credits available just for paying for (or repaying) your education, You can't claim them all, but letting Uncle Sam know about your education can boost your refund.
    Updated: March 30, 2018

    What You'll Learn

    • Different student loan tax benefits.
    • Which you may be eligible for.
    • How much of a tax break you could receive.
    Two people sitting next to a tree looking at a tablet

    We aren't tax professionals, but we know that one way to boost your refund is to let Uncle Sam know about your college education. There are quite a few tax deductions and tax credits available, but you can't claim them all.

    Below is a general overview of your options. This tool from the IRS can help you understand what you can claim as well. Remember, income taxes aren't one size fits all, and your income level (MAGI), filing status, or residence status may affect your tax benefits. To learn more about your specific situation, contact a tax professional.

     Available For Undergraduate StudentsAvailable For Graduate StudentsAnnual BenefitMaximum Income (MAGI)IRS Form
    Lifetime Learning Tax Credit



    Up to $2,000

    $66,000 single filers
    $132,000 married filing jointly

    Forms 1098-T and 8863

    American Opportunity Tax Credit



    Up to $2,500

    $90,000 single filers

    $180,000 married filing jointly

    Forms 1098-T and 8863

    Tuition And Fees Deduction



    Up to $4,000

    $80,000 single filers

    $165,000 married filing jointly

    Forms 1098-T Form 8917

    Student Loan Interest Deduction



    Up to $2,500

    $80,000 single filers

    $165,000 married filing jointly

    Form 1098-E

    (Note: The tuition and fees deduction originally expired at the end of 2016 but was extended through 2017.)

    To learn more about the currently available deductions and credits, check out Publication 970 or the Internal Revenue Service (IRS) website. And remember, it's always a good idea to check with a tax professional to be sure you're claiming benefits correctly.

    What If My Employer Helps Me Pay For School?

    Some companies offer to help pay your tuition costs as a way to invest in employee development. If your company offers this assistance:

    • Generally speaking, you can receive up to $5,250 toward undergraduate or graduate tuition, fees, and books totally tax-free.
    • Additional assistance may be taxable. Speak to your employer to find out more about your specific situation.

    About Your Tax Forms

    Here are some brief descriptions of the tax forms we mentioned above:

    Form 1098-T

    If you are a college student or recent college student, your 1098-T will show how much you paid in tuition in the previous calendar year. It will be mailed by January 31 from your school.

    You may be able to use this form to claim the following:

    • American Opportunity Tax Credit
    • Lifetime Learning Tax Credit

    Keep in mind that you can only use one of these benefits each year, so be sure to ask your tax professional which will increase your refund the most.

    Schools are not always required to provide this form. If yours does not, but you qualify for one of the education benefits listed above, you can still claim it by demonstrating that you (or a dependent) was enrolled at an eligible educational institution and proving that you paid for qualified tuition and related expenses.

    Form 8863

    This form is used to apply for the American Opportunity Tax Credit or the Lifetime Learning Tax Credit. Use the information on your 1098-T to fill out your 8863. Then, submit the completed 8863 to the IRS along with your tax return.

    Starting with tax year 2017, you must provide the educational institution's employer identification number (EIN) on form 8863 to claim the American Opportunity Tax Credit. You should be able to get this number from Form 1098-T or your school itself.

    Form 1098-E

    The 1098-E form documents the total amount of interest you paid last year on your federal student loans. If you have been making regular interest payments on your student loans and you want to claim the Student Loan Interest Deduction, you'll need to use form 1098-E. If you paid at least $600, the company you made your payments to will mail your 1098-E form by January 31.

    If you paid less than $600 and you still want to claim this deduction, you may be able to do so even if you weren't sent a 1098-E form. Contact your loan holder (servicer or lender) to find out how much interest you paid in the previous year. You may have the option to print your 1098-E from their website. If it's not available online, just call them to request it.

    This site was prepared for informational purposes only and is not meant to be tax or legal advice. Please see your tax professional for additional guidance.

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