Tax filing season just recently began and although filers have until April 15th, it’s never too early to get started and turn in all your required paperwork. If you’re a student filing taxes, you should know that there are multiple credits and deductions you can take advantage of to save money this season. Here are a few tax breaks every student should know.
[Read More: How Students Can Save Money at College]
American Opportunity Tax Credit
The AOTC is a great opportunity for students to get up to $2,500 annually for up to four years. Even if your liability is low and you don’t owe the IRS, you can still get up to $1,000 in cash as a refund. Complete form 8863 to claim the AOTC.
Lifetime Learning Credit
Similar to the LLC, the AOTC is a credit for individuals pursuing higher education. The LLC is worth up to $2,000, but there is no limit to how many years you can claim it and is not refundable. To qualify, you or your dependent must be enrolled at an approved university or college for at least one semester.
Student Loan Interest Tax Deduction
If you’re most students at a four-year college or university, you probably have a student loan of some kind. You can deduct up to $2,500 of the interest you paid the loan over the course of the year with the Student Loan Interest Tax Deduction. This is interest you paid on a loan you took out solely to pay qualified education expenses.
Tuition and Fees Deduction
The Tuition and Fees Deduction can deduct up to $4,000 off your tax return, thereby reducing your taxable income. This deduction is eligible for students, spouses of students or if you have a dependent who is a student. Expenses deducted do not include living expenses, however.