Education Going Back to School After 40: Know The Tax Benefits Read the Article Open Share Drawer Share this:Click to share on Facebook (Opens in new window)Click to share on Twitter (Opens in new window)Click to share on LinkedIn (Opens in new window)Click to share on Pinterest (Opens in new window)Click to print (Opens in new window) Written by Elle Martinez Published Aug 11, 2023 2 min read Reviewed by Katharina Reekmans, Enrolled Agent Going back to school, whether to start a degree, finish up one from years ago, or pursue an advanced degree, can be both rewarding and stressful. Working on papers, handling work assignments, and/or taking care of family can be a lot to handle. The good news is that you can lighten your financial load by making sure you claim all the tax benefits you’re entitled to. Educational Tax Deductions and Credits While they are somewhat related, tax credits and deductions are different. Tax deductions reduce your taxable income, while tax credits lower your tax bill. In addition, some tax credits are refundable, meaning you can not only reduce your bill to zero but get some money back. With school, some of the biggest tax deductions and credits include: American Opportunity Tax Credit (AOTC) This is a refundable tax credit for eligible educational expenses during your first four years for up to $2,500 per student. If you’ve already completed four years’ worth of college work, then you don’t qualify for this credit. You may qualify if your modified adjusted gross income is up to $90,000 or up to $180,000 for married couples filing jointly. Lifetime Learning Credit This tax credit can help with tuition and related expenses for up to $2,000 per tax return, provided you’re enrolled at an eligible educational institution. There is no limit to the years you can claim this credit. You may qualify if your modified adjusted gross income is up to $90,000 or up to $180,000 if you are married and filing jointly. To see if your school is considered eligible, you can check out the FAFSA site and see if it has a Federal School code. More Educational Tax Benefits Have student loans? Make sure you deduct the interest on them. You may be able to deduct up to $2,500 of student loan interest paid. Of course, you’ll do your finances a favor if you can minimize the student loans you take out. You should also talk with your financial aid office to make sure you’re applying for relevant scholarships and grants. Student Discounts and Other Bonuses Besides taxes, make sure you’re taking advantage of your student status and get those discounts! You may be able to snag better deals on tickets to music venues, museums, and movies if you’re a student. The next time you’re out, proudly show your ID. Every little bit helps and the money you save can be redirected towards other goals, like contributing more for retirement. Thoughts on Going Back to School I’d love to hear from you about your educational plans. How many of you are going to or coming back to school? What motivated you to start or finish a degree? Previous Post Studying Abroad This Fall? Make Sure You Know These Tax… Next Post Four Tax Tips for Teachers Written by Elle Martinez Elle helps families at Couple Money achieve financial freedom by sharing tips for reducing debt, increase income, and building net worth. Learn how to live on one income and have fun with the second. More from Elle Martinez Visit the website of Elle Martinez. Follow Elle Martinez on Facebook. Follow Elle Martinez on Twitter. Leave a ReplyCancel reply Browse Related Articles Education Back-to-School Savings: Tax Tips for Parents and Stude… Education Education Tax Credit: Back-to-School Tax Savings & … Education Education Tax Deductions and Credits to Maximize Your T… Tax Deductions and Credits Tax Credits and Deductions for Families Deductions and Credits A Guide to Child Tax Benefits Education Back-to-School: Education Tax Benefits to Offset Educat… Education Is This Deductible? Going Back to School Tax Tips Tax Credits 101: What They Are & How They Work Education Tax Considerations for College Students Family Child Tax Benefits: How Parents Can Save on Taxes