With the national student debt already past the $1 trillion mark, we figure now is a good time to revisit some of the most lucrative tax breaks out there for college students.
• American Opportunity Credit. Students are eligible to claim up to $2,500 for the first four years of post-secondary education. And since 40 percent of the credit is refundable, that means students can get back up to $1,000 on their refund -- even if they don't owe any taxes, according to the IRS. What qualifies: Tuition and fees, course related books, supplies and equipment. Income: Couples filing jointly who earn less than $160,000; single-filers who earn less than $80,000.
• Lifetime Learning Credit. For students earning less than $60,000 (single-filers) or $120,000 (married, filing jointly), they can claim up to $2,000 education-related expenses.
• Tuition and fees deductions. Like the American Opportunity Credit, students earning less than $80,000 (single) or $160,000 (married, filing jointly) can deduct up to $4,000 in tuition and fees on their annual tax returns. Use it while you can -- this tax break is set to expire at the end of 2013, unless lawmakers extend it.
• Student loan interest deduction. If you've taken out a federal or private student loan, you're eligible to deduct up to $2,500 worth of interest paid on the loan as an "above-the-line" exclusion from your income. You don't have to itemize your deductions in order to claim it.
Isaac Black, Founder
Black Excel: The College Help Network