Getting an education is of the utmost importance if you want to make your way in the world, but it can also be one of the most expensive propositions out there.
With tuition and book costs rising all the time, more and more Americans are meeting a number of expenses that they are having trouble affording. Luckily, come tax season, these Americans can reduce the tax burden that they undertake through the Lifetime Learning Tax Credit. How does the Lifetime Learning Tax Credit worksThe Lifetime Learning Tax Credit has no limits on how many years it can be taken. It allows the user to claim up to $2,000 in credits instead of deductions. Many Americans have a hard time understanding the difference, so in a nutshell, here it is: deductions reduce the overall amount that is subject to tax, while credits reduce the tax liability itself. Being able to take off up to $2,000 in tax liability is a major draw of this particular tax credit, and it can be the difference between paying in, breaking even, or coming out ahead, for many families. Who's eligible? The answer to this question has three individual answers that you need to be aware of to ensure that you can take the credit. These answers are as follows: People, who pay qualified higher education expenses. This could be the eligible student himself, and what is meant by qualified higher education expenses is this: expenses incurred directly by college, university, or reputable trade/technical schools. People, who pay the education expenses of an eligible student. Maybe you don't attend college directly, but you have children, who are, and whom you financially support. If so, then as long as you are making those payments, you can claim the Lifetime Learning Tax Credit. People, who pay for eligible student that is you, your spouse, or dependent you claim as exemption.Last but not least when it comes to who is eligible for the credit, anyone on the tax return that is claimed as an exemption can help out with the tax burden. So can you and your spouse. Bottom line: if you go to school or assist someone in your household, who is attending a higher education facility, then you are eligible. When it comes to tax season, American families need all the help they can get. It's only fair that with so many wealthy individuals finding their way to tax loopholes that reduce liability by a vast percentage, ordinary hard working Americans should have the same advantages. If you're sick of feeling the wolves at the door, and you are ready to walk away from April 15 ahead rather than behind, then you need to take advantage of credits like these.
Dennis Piper Accountants, Pittsburgh is a CPA firm with over 20 years of experience. His services include business consulting and tax compliance help to corporations, individuals, partnerships, limited liability companies, estates, trusts, and not-for-profits. Dennis is also a 2008 SBA Award Winning CPA Pittsburgh PA.