Tax Tips & Calculators

Tax Breaks for Education

A group of tax benefits are available to those who are pursuing higher education for themselves, their spouse, or their dependents.

• The American Opportunity Credit provides a refundable tax credit of up to $2,500 for undergraduate education.
• The Lifetime Learning Credit provides a tax credit of up to $2,000 for any level of college education (even graduate school) and doesn't require a minimum level of enrollment.
• Deducting college tuition can be accomplished through the tuition and fees tax deduction.
• Interest on student loans may be deductible up to $2,500 per year.
• College savings plans, also known as Section 529 plans, are a specific type of savings account that allow people to save for college expenses.

For those who qualify, the American Opportunity credit will generally save you the most tax money - with the Lifetime Learning credit the next-best tax break. And for those who have recently graduated, the student-loan interest deduction provides a measure of relief.

Read more about tax breaks for education