Most college kids across the country know full well that their budgets can be extremely tight. Between paying for school and often only being able to work part-time jobs, there's not usually a lot of money to pay for everything they might want. Fortunately, when it comes to the amount they have to pay the Internal Revenue Service every year, there are a number of deals that might be available to them, and which could end up saving them thousands.
Perhaps the largest of these is known as the American Opportunity Credit, which has been available for some time now. Anyone who is paying tuition can claim it, and use it to offset as much as $2,500 per year for the first four years they are pursuing a degree. Likewise, for people who are paying for the tuitions of multiple people (for instance, parents covering these costs for multiple children), they can claim $2,500 per student. Likewise, the Lifetime Learning Credit allows Americans to write off as much as $2,000 per student per year for not only tuition, but also books, supplies, and so on that might be necessary for school.
However, it's important for students to note that while many of them may not have incomes large enough to necessitate their taking the time to submit a tax filing, they will obviously have to do so in order to claim these benefits. Otherwise, they would not be able to do so.
What about other costs?
Meanwhile, it's important to note that there are also tax deductions that can be taken by anyone who is still carrying student loan debt. Specifically, any amount still being paid down for a person's own student loan interest payments, as well as that of their spouse or child, can be written off up to $2,500. Interestingly, this applies to student loans issued by any type of lender, not just the federal government.
Of course, the ways in which each student or recent graduate will be able to claim these deductions and credits will vary based upon their personal circumstances, and as such it's going to be important for them to work closely with licensed tax preparers not only during filing season but in the run-up to it as well. This will help them to identify all the benefits available to them, and avoid any other issues that might otherwise present themselves.