How to Save Money on Your Kid's Tuition

Editor's note: As a special feature for March, TheStreet.com offers an ongoing series on everything you need to know about taxes. Today is part 12.

It costs a ton of money to send your kid to a keg party these days.

Whether he's whooping it up at a $45,000-a-year private university or your local state college, the cost of admission is not cheap.

Uncle Sam understands, sort of. There are a few education tax credits and deductions available to help defray the costs of your child's four years of bliss. And while they won't wipe out your whole tuition bill, you have to take what you can get.

In today's column I'll take a look at these tax tips:

• Save with a 529.
• Hope, Lifetime Learning credits
• Tuition and fees deduction
• Write off that class

529 Skidoo, Hike!

Big thing to note: The only expenses that qualify for these credits and deductions are the tuition and fees you need to pay for enrollment or attendance at any college, vocational school or other post-secondary educational institution.

That means you're on your own for room and board, books and all the other expenses that your little darling must pay.

But that's where your 529 college savings plan will come in handy. Imaginatively named after the section of the IRS code that created it, a 529 plan is an education savings plan run by a state or educational institution designed to help families set aside funds for future college costs.

"Distributions from those plans can be used for books, supplies, equipment, room and board, transportation and other necessary expenses in addition to tuition," according to CCH, a company that provides tax info to the pros.

And don't forget: As long as the money is used for those college expenses, the distributions are federally tax-free (and tax-free in some states too). So be sure to open a 529 account for your kid, pronto.