Lifetime Learning Tax Credit

If you are not familiar with the Lifetime Learning Tax Credit, it is a federal tax credit that is set up specifically for College education expenses like books, tuitions and room and board. You will need all of the help that you can get if you are looking for College funding. There are scholarships, grants and loans out there just waiting to be taken. In addition to these resources there are also tax credits like the Lifetime Learning Tax Credit and others juts like it.

Like all other resources for student financial aid, there are education requirements that have to be made. If you want to qualify for the Lifetime Learning Tax Credit then you will have to meet these education requirements. The requirements are that if any student who is paying for qualified tuition and all related expenses at a qualifying College is eligible. The student can either be you, your child or even your husband or wife.

There are education expenses that are not restricted to any undergraduate program. The graduate and continuing education programs may also be eligible. If you are currently enrolled in a half time program then you would not be eligible only full time students are eligible for the Lifetime Learning Tax Credit. This is not a onetime tax credit; you are eligible for every year that you are attending school. There is only one tax credit allowed per family on the tax returns.

There are also restrictions on the Lifetime Learning Tax Credit; for example, these tax credits are for Modified Adjusted Gross Income of $ 58,000 or less and $ 116,000 if you are filing a joint return. The credit is non refundable, this means that though it can reduce the amount of income tax you owe to nothing but if the amount of the credit is more than the amount of taxes that you owe then you don’t get anything back.

The way this credit is calculated is this, let’s say you are single and you filed a tax return for less than $ 48,000, you can claim about 20% for the Lifetime Learning Tax Credit for every $ 10,000. The qualifying expenses on these tax credits are tuition, fees, books and other education costs. Once you are ready to file for your tax credit, you will need the IRS form 1098T and the 8863. Make sure that you read and fill out these forms properly. Make sure that you are filing out the right academic period and all of the numbers are correct.

These tax credits won’t help you pay for College but they will help you when it comes to tax time. You may even have some money refunded to you. Like any other tax returns, make sure that your information is accurate and you get the paperwork done on time. Even if you can’t get the tax credit until the end of the tax year, you will have something to look forward to. There may be other tax credits that you will want to look into. Every little bit helps when it comes to College funding. Talk to an accountant and find out if there is any other tax breaks or credits that you can take.