Ask the Taxpert: How the IRS indirectly pays for a Penn education: Hope and Lifetime Learning Tax Credits
More beer money for college
Welcome to the last installment of “How the IRS indirectly pays for a Penn education!” The two tax credits for higher education available for 2008’s return are the Hope and Lifetime Learning Credits. Keep in mind that any student can only claim one of these three credits and deductions: Hope, Lifetime Learning, or the tuition and fees deduction.
There is an income restriction on who can claim either of these credits on their tax return: the tax credit decreases when your adjusted gross income reaches $48,000, and you become ineligible at $58,000.
Only tuition and mandatory fees can be claimed for these credits. Like the tuition and fees deduction, you cannot include amounts spent on room and board, insurance, transportation and other non-tuition expenses. In other words, Friday night BYOs with your friends are not considered a “qualified expense” by the IRS, although many of us might beg to differ. Read more…
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