Two federal tax credits may help you offset the costs of higher education for yourself or your dependents. These are the American Opportunity Credit and the Lifetime Learning Credit.

To qualify for either credit, you must pay postsecondary tuition and fees for yourself, your spouse or your dependent. The credit may be claimed by either the parent or the student, but not both. If the student was claimed as a dependent, the student cannot file for the credit.

For each student, you may claim only one of the credits in a single tax year. You cannot claim the American Opportunity Credit to pay for part of your daughter's tuition charges and then claim the Lifetime Learning Credit for $2,000 more of her school costs.

However, if you pay college expenses for two or more students in the same year, you can choose to take credits on a per-student, per-year basis. You can claim the American Opportunity Credit for your sophomore daughter and the Lifetime Learning Credit for your spouse's graduate school tuition.

Here are some key facts the IRS wants you to know about these valuable education credits:

  1. The American Opportunity Credit
    • The credit can be up to $2,500 per eligible student.
    • It is available for the first four years of postsecondary education.
    • Forty percent of the credit is refundable, which means that you may be able to receive up to $1,000, even if you owe no taxes.
    • The student must be pursuing an undergraduate degree or other recognized educational credential.
    • The student must be enrolled at least half time for at least one academic period.
    • Qualified expenses include tuition and fees, coursed related books supplies and equipment.
    • The full credit is generally available to eligible taxpayers whose modified adjusted gross income is less than $80,000 or $160,000 for married couples filing a joint return.
  2. Lifetime Learning Credit
    • The credit can be up to $2,000 per eligible student.
    • It is available for all years of postsecondary education and for courses to acquire or improve job skills.
    • The maximum credited is limited to the amount of tax you must pay on your return.
    • The student does not need to be pursuing a degree or other recognized education credential.
    • Qualified expenses include tuition and fees, course related books, supplies and equipment.
    • The full credit is generally available to eligible taxpayers whose modified adjusted gross income is less than $60,000 or $120,000 for married couples filing a joint return.

If you don't qualify for these education credits, you may qualify for the tuition and fees deduction, which can reduce the amount of your income subject to tax by up to $4,000. However, you cannot claim the tuition and fees tax deduction in the same year that you claim the American Opportunity Tax Credit or the Lifetime Learning Credit. You must choose to either take the credit or the deduction and should consider which is more beneficial for you.

For more information about these tax benefits, see IRS Publication 970, Tax Benefits for Education available at www.irs.gov or by calling the IRS forms and publications order line at 800-TAX-FORM (800-829-3676).

TaxACT helps you determine which credit is more beneficial to you and walks you through other education tax benefits for your guaranteed maximum refund. Start your TaxACT Online return now.

You can also use TaxACT's College Tax Whiz to learn about key education tax breaks.

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Upcoming Tax Dates

April 10 Employees who work for tips
If you received $20 or more in tips during March, report them to your employer. You can use Form 4070.

April 10 Communications and air transportation taxes under the alternative method
Deposit the tax included in amounts billed or tickets sold during the first 15 days of March.

April 14 Regular method taxes
Deposit the tax for the last 16 days of March.

April 15 Individuals
File a 2014 income tax return (Form 1040, 1040A, or 1040EZ) and pay any tax due. If you want an automatic 6 month extension of time to file the return, file Form 4868, Application for Automatic Extension of Time To File U.S. Individual Income Tax Return. For more information, see Form 4868. Then, file Form 1040, 1040A, or 1040EZ by October 15.

April 15 Individuals
If you are not paying your 2015 income tax through withholding (or will not pay in enough tax during the year that way), pay the first installment of your 2015 estimated tax. Use Form 1040ES.

April 15 Household Employers
If you paid cash wages of $1,800 or more in 2014 to a household employee, you must file Schedule H - Details

April 15 Partnerships
File a 2014 calendar year return (Form 1065) - Details

April 15 Partnerships
Electing large partnerships: File a 2014 calendar year return (Form 1065-B) - Details

April 15 Corporations
Deposit the first installment of estimated income tax for 2015 - Details

April 15 Social security, Medicare, and withheld income tax
If the monthly deposit rule applies, deposit the tax for payments in March.

April 15 Nonpayroll withholding
If the monthly deposit rule applies, deposit the tax for payments in March.

April 15 Household employers
If you paid cash wages of $1,900 or more in 2014 to a household employee, you must file Schedule H (Form 1040). If you are required to file a federal income tax return (Form 1040), file Schedule H (Form 1040) with the return and report any household employment taxes. Report any federal unemployment (FUTA) tax on Schedule H (Form 1040) if you paid total cash wages of $1,000 or more in any calendar quarter of 2013 or 2014 to household employees. Also, report any income tax you withheld for your household employees.

April 27 Communications and air transportation taxes under the alternative method
Deposit the tax included in amounts billed or tickets sold during the last 16 days of March.

April 29 Regular method taxes
Deposit the tax for the first 15 days of April.

April 30 Social security, Medicare, and withheld income tax
File Form 941 for the first quarter of 2015. Deposit or pay any undeposited tax under the accuracy of deposit rules. If your tax liability is less than $2,500, you can pay it in full with a timely filed return. If you deposited the tax for the quarter timely, properly, and in full, you have until May 11 to file the return.

April 30 Federal unemployment tax.
Deposit the tax owed through March if more than $500.

April 30 Form 720 taxes
File Form 720 for the first quarter of 2015.

April 30 Wagering tax
File Form 730 and pay the tax on wagers accepted during March.

April 30 Heavy highway vehicle use tax
File Form 2290 and pay the tax for vehicles first used in March.

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