Tuition at a private 4-year college can cost $35,000. Tack on another $12,000 for room and board and the annual bill can reach $50,000.
The IRS provides two tax benefits to taxpayers who are paying for higher education in 2018 for themselves, their spouses, or dependents. The American opportunity credit and the lifetime learning credit may help lower their tax load.
Use Form 8863 (https://www.irs.gov/forms-pubs/about-form-8863).
The American opportunity credit is worth up to $2,500 per eligible student, applies only for the first four years of college, and is available for students pursuing degrees.
The lifetime learning credit is worth up to a maximum of $2,000 per tax return per year for all students. It is available for all years of postsecondary education.
Taxpayers must get Form 1098-T from an eligible educational institution.
Other details may apply, and you can find more information on the IRS website.
* This information is not intended to be a substitute for specific individualized tax advice. We suggest you discuss your specific tax issues with a qualified tax advisor.
Tip adapted from IRS.gov