- Student Loan Interest Deduction. Student loan borrowers may be eligible for up to $2,500 in student loan interest deductions to offset income subject to tax. Available for both federal and eligible private student loans in repayment, single filers with a modified adjusted gross income of less than $80,000 and those with a joint modified adjusted gross income less than $160,000 qualify for this deduction.
- Tuition and Fees Deduction. Students and families can claim up to $4,000 in expenses for higher education to offset income subject to tax. This deduction is taken as an adjustment to income and an individual does not need to itemize other deductions. Individuals with a modified adjusted gross income of up to $80,000 and those with a joint modified adjusted gross income of up to $160,000 can file for this deduction. Families can claim only one credit for the same student in any one year, and cannot take both this deduction and a credit in the same year.
- The American Opportunity Credit. Eligible taxpayers may qualify for a maximum annual credit of $2,500 per student for the first four years of higher education. To be eligible, a student must be enrolled at least half-time in a degree or other recognized educational credential. The credit can be applied to course-related books and supplies in addition to tuition and fees. A single taxpayer can have a 2016 income of up to $80,000 to receive the full credit, or a partial credit is available for an income amounting to $90,000. Married filers with an adjusted gross income up to $160,000 are eligible for the full credit and up to $180,000 for a partial credit.
- The Lifetime Learning Credit. Eligible taxpayers may qualify for up to $2,000 per tax return to help pay for undergraduate, graduate, and professional degree courses - including courses designed to improve job skills. There is no limit on the number of years an individual can claim the Lifetime Learning Credit. The Lifetime Learning Credit is available to taxpayers with modified adjusted gross income of less than $65,000, or $131,000 if filing jointly. The credit is reduced gradually for single filers making more than $55,000, and for joint filers making more than $111,000.
|1||This information is not meant to provide tax advice. Whether filing jointly or separately, consult with a tax advisor for education tax credit and deduction eligibility.|