There is a possibility to absorb as much as $2,500 of tuition if your child’s education is contingent on your taxes. There are some rules you have to follow.
One of the tax credits that is easiest to get to claim is The American Opportunity Tax Credit. The American Opportunity Credit for qualifying expenses related to education for yourself, your dependent children or spouse in up to four years of undergraduate study. The AOTC is a tax-free credit that is a portion of the undergraduate schooling that covers tuition only and not the cost of room and board. For almost all colleges, the cost of tuition is more than the maximum amount of $2,500 for the AOTC.
One of the most difficult aspects that is the American Opportunity Tax Credit is the fact that it’s only available for four years. During that time, your child will be in school for five tax seasons since school hours do not precisely coincide with your tax year. The AOTC is not available during the spring semester. This credit will help you reduce your tax bill.