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- American Opportunity Tax Credit - Money For Your Education
Levitra buyThe workforce is in transition right now and there is a growing number of Americans returning to college to either update their degrees or get a college education for a totally new career. The reality of paying for tuition, books and other college related expenses on top of the usual living expenses makes the prospect daunting for many. Fortunately, in 2009 and 2010 Congress enacted a new college tuition tax credit designed to help pay for education expenses.
The American Opportunity Tax Credit (Hope Credit-Modified for 2009 and 2010) is a college tax credit for up to $2,500 for qualified education expenses paid for each eligible student. This college tax credit is for single filers with income below $80,000 (partial college tax credit for taxpayers between $80,000 and $90,000) and joint filers with incomes below $160,000 (partial college tax credit for taxpayers between $160,000 and $180,000).
Here is how the credit works: If the taxpayer falls within the income thresholds they may be eligible to receive 100% of the first $2,000 in qualified tuition and related expenses and an additional 25% of the next $2,000 in qualified tuition and related expenses. This gives the tax payer a whopping $2,500 in dollar for dollar tax credits!
What’s even more incredible about this education tax credit is that for the first time ever part of the credit $1,000 or 40% of the total credit is refundable (you receive the money even if you don’t have a tax liability)!
After 2010 the college tax credit reverts to the prior Hope Tax Credit or the Lifetime Learning Tax Credit so if you’ve been thinking about going back to school, this would be a good year to get off the fence.
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Hello Takisha, it looks like we’re business neighbors! Glad to hear you’re enjoying the blog, let me know if you have any specific tax related questions I can help you with.
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