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Take advantage of tax breaks for education expenses from "summary" of The Tax and Legal Playbook by Mark J. Kohler
When it comes to education expenses, there are several tax breaks that can help you save money. One of the most common tax breaks is the American Opportunity Credit, which can provide a credit of up to $2,500 per student for expenses such as tuition, books, and supplies. This credit is available for the first four years of post-secondary education. Another tax break to consider is the Lifetime Learning Credit, which can provide a credit of up to $2,000 per tax return for any level of post-secondary education. This credit is not limited to the first four years of education, making it a valuable option for lifelong learners. In addition to credits, there are also tax deductions available for education expenses. For example, the Tuition and Fees deduction allows you to deduct up to $4,000 of qualified education expenses for yourself, your spouse, or your dependents. This deduction can be especially beneficial for those who do not qualify for the American Opportunity Credit or Lifetime Learning Credit. It's important to note that you cannot claim both a credit and a deduction for the same expenses in the same year. You will need to evaluate your situation and choose the option that provides the most tax savings. To take advantage of these tax breaks, you will need to keep detailed records of your education expenses and meet any eligibility requirements outlined by the IRS. By taking the time to explore your options and plan accordingly, you can maximize your tax savings and make education more affordable.
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