In addition to scholarships, loans, savings plans and work, there are a few other ways to recoup some of your college tuition expenses.
The American Opportunity credit allows you to claim 100% of the first $2000 you spend for tuition for each year for four years as long as you are at least a half-time student. Moreover, you can claim 25% of the next $2000 spent on tuition. There are income restrictions for this credit, although they are relatively high.
If you’ve already used up your four years of the American Opportunity credit, you can claim the Lifelong Learning Credit. It’s worth 20% of the amount you spend on tuition with a maximum benefit of $2000. You can use it even if you only take one class, and at the present time, it’s good for as many years as you are enrolled. Again, there are income limits.
In lieu of these two credits, you are allowed to deduct up to $4000 of the amount of tuition and fees you paid in a calendar year. This deduction also has income limits as well as a few more restrictions. You can’t deduct any for expenses that you paid from a 529 account. Neither can you take advantage of this deduction if you have already used the American Opportunity or Lifelong Learning credits.