Paying for your child’s college can be overwhelming and put a dent in your bank account. The good news is there are a few tax benefits you can use that can help offset the burden of student loans. There are two main options when it comes to tax benefits, but there are others as well. You can find them by looking on the IRS website or talking to a tax preparer. The American Opportunity Tax Credit and the Lifetime Learning Credit both are available to not only the student, but also their spouse and their dependents.

American Opportunity Tax Credit
The American Tax Credit, (AOTC) can be worth a maximum of $2,500 per eligible student per year. The tax credit however is only available for the first four years at an eligible college or vocational school for student pursuing a degree or another recognized education credential. If your child or you go an extra year or two or go into graduate school, the tax credit is not available. Taxpayers can claim the AOTC for a student enrolled in the first three months of 2018 as long as they paid qualified expenses in 2017. 
To be able to claim the credit, students should generally receive a Form 1098-T Tuition statement from their university by January 31st. This statement will help you figure out what your credit is. The form will have the amounts received or billed during the year in either Box 1 or 2. Beware, this amount may not be the amount you are able to claim. To receive this credit, you must also complete Form 8863 and attach it to your Form 1040 or Form 1040A. 
Lifetime Learning Credit
The Lifetime Learning Credit (LLC) is for qualified tuition and related expenses paid for eligible students enrolled in an eligible educational institution. The credit can help pay for not only undergraduate degree courses, but also graduate, and professional degree courses. There is no limit on how many years you can claim this ticket, and it can be worth up to $2,000 per tax return. Unlike the AOTC, the limit on the LLC applies to each tax return rather than to each student. The course of study must be either part of a post-secondary degree program or taken by the student to maintain or improve job skills. 
To claim the LLC, you must complete the Form 8863 and attach it to your Form 1040 or Form 1040A. You can fill out Form 8863 once you receive Form 1098-T, the Tuition Statement from your university. There are some income limits for the LLC. To claim the full credit, your modified adjusted gross income must be $65,000 or less or $131,000 or less if you are married and filing jointly.
If you are unsure which tax credit will work best for you and aren’t sure if you are qualified, Polston Tax can help! Our team of Tax preparers and accountants can look at your finances and determine which credits and deductions you can take. Call us today at 844-841-9857 or use the form below to sign up for a free consultation!