Learning for a lifetime
Whether you’re still enrolled in school or paying off student loans, navigating the tax reliefs available to you for education purposes can be confusing. In this article we break it down into bite-sized chunks to help you take advantage of all the government incentives available.
Student loan interest deduction: most of us have student loans (I still have some). Depending on your income levels, you may be able to deduct up to $2,500 in student loan interest paid each year. This benefit is phased out as your income increases.
American Opportunity Tax Credit and Lifetime Learning Credit: these two credits are available to reduce your tax liability, and even put money in your pocket. Here’s a handy chart comparing the two credits: https://www.eitc.irs.gov/other-refundable-credits-toolkit/compare-education-credits/compare-education-credits
Also, the IRS has an interactive tool to help guide you through which credit(s) you can claim and how to maximize your savings. You can find it here: https://www.irs.gov/help/ita/am-i-eligible-to-claim-an-education-credit
Please reach out to your Collective team, if you have any questions!
Disclaimer: The information contained in this document is provided for informational purposes only and should not be construed as financial or tax advice. It is not intended to be a substitute for obtaining accounting or other financial advice from an appropriate financial adviser or for the purpose of avoiding U.S. Federal, state or local tax payments and penalties.