Have a Kid in College? Here’s Tax Deductions You May Not Know About

The increasing cost of college has given rise to a huge projection in college debt. 

Luckily, the US government provides a variety of tax breaks for college students or parents through tax credits, tuition, and fees deduction, and tax-free savings account. 

To understand how you might take advantage of these tax deductions, we’ve gathered 7 tax deductions and credits you should know to save the most money on your bill for the tax year.

It might seem odd to start with retirement when you’re just starting on your career journey or only have a weekend job, but this is a valuable tax deduction.

1. Retirement Account Contributions (IRA)

Each year, you can offset your capital gains with capital losses and claim up to $3,000 in losses against your earned income.

2. Capital Gain Losse

3. American Opportunity Tax Credit

If you pay your way for college including tuition & other qualified higher education expenses, you may have the ability to claim the American Opportunity tax credit.

4. Lifetime Learning Credit

Closely related to the American Opportunity tax credit, this one also lowers your tax bill on a dollar-for-dollar basis, but only one can be claimed.

5. Recovery Rebate Tax Credit

If you aren’t claimed as a dependent on someone’s tax return, and you didn’t receive a check, you could claim the Recovery Rebate Tax Credit on your return.

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