IRS Reminds Parents and Students of College Tax Credits (IR-2014-90)
The IRS issued a reminder to parents and students of the various college tax credits and education-related tax benefits for the tax years 2014 and beyond. The American Opportunity Tax Credit generally offers the greatest tax savings of the credits and deductions that are available for eligible students. The Lifetime Learning Credit should be considered for eligible students who attend part-time or those going to graduate school. Neither of the two credits can be claimed by a nonresident alien, a married person filing a separate return or someone claimed as a dependent on another person’s return. Students generally receive Form 1098-T from the institutions they attend by the end of January following the calendar year of their attendance at an eligible institution. This form will provide information about the tuition paid and other information; however, taxpayers should be aware that the amount that may be claimed may differ from the amounts on the form. The news release also gives brief statements on scholarships and fellowship grants, student loan interest, savings bonds for college, and qualified tuition programs that may be used for education-related tax benefits.