What Can I Deduct On My Taxes?

A tax credit that helps pay for college is now much bigger and better. Bigger, because it puts more money in your pocket. And better, because more families qualify for the cash What used to be called the Hope education credit, is now the American Opportunity credit. Heres how it works for 2009 and 2010. For starters, the maximum amount of the credit has increased from 00 to 00 per year, per student. And its available for four years of college, not just the first two like the old Hope credit. Finally, many more middle-class families will benefit. While those with high incomes still wont qualify, the income limit has been increased by 60 percent. For example, married couples can now make 0000 before this tax break starts to disappear. Remember, a tax credit increases your refund, or cuts the amount of tax you owe, dollar for dollar. And, if your credit is bigger than your total tax bill for the year, the government will cut you a check for the difference, up to 00. The American Opportunity credit doesnt replace two other education tax breaks, the Lifetime Learning Credit and the tuition deduction. But for most families, the new credit is the best choice.

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Tags: college, elizabeth, finance, kiplinger, loans, magazine, money, ody, personal, school, university

This entry was posted on Sunday, May 16th, 2010 at 6:29 pm and is filed under Tax Questions. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.