How College Students & Parents Can Save Money During Tax Time

When your child starts college, there are ways for you to save money during tax time. Today, we are going to discuss some of the ways that college students and parents can save money during tax time.

The American Opportunity Credit

This credit allows you to take up to $2,500 per student for expenses such as tuition, enrollment fees, and course materials during the first four years of post-secondary education.

The Lifetime Learning Credit

This credit is for students who are not pursing a degree. It allows you to claim up to 20% of your expenses up to $10,000. In order to claim this credit you have to receive federal financial aid and the credit covers expenses such as tuition and books. The best part is you can take advantage of this credit even if you only take one course during the year.

Apply For Scholarships

Going to college can be expensive, which is why it is important that you apply for all of the scholarships that you are eligible for. Scholarships will allow you to deduct the overall cost of your education. Therefore, your parents can keep more of their hard-earned money in their wallets.

Turn in Your FAFSA on Time

If you plan to take advantage of the Lifetime Learning Credit, it is important that you complete your FAFSA on time. Additionally, the sooner you send it in the faster your financial aid can be boosted since states have their own deadlines, which may differ from federal deadlines.

Remember we are a Seattle CPA firm along with serving clients in Redmond and Bellevue! Get in touch with us at (425) 483-6600 for a tax consultation!

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