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Step 1
Consider the Hope Credit. Qualifying students can credit up to $1,800 come tax time. For the 2008 tax year, students in Midwestern areas affected by disasters can claim up to twice that much. The Hope Credit does not offer refunds, but reduces the amount of taxes to be paid.
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Step 2
Look into Lifetime Learning Credit. The Lifetime Learning Credit offers students up to $2,000 in claims and $4000 for individuals in disaster struck areas. Like the Hope Credit the Lifetime Learning Credit allows for tax breaks, but if the amount you qualify for exceeds the claim, you will not receive the extra as a refund.
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Step 3
Utilize student loan interest deductions. On student loans taken out exclusively for education, the interest paid by the student, parent or spouse of a qualifying student can be claimed come tax time. This tax deduction is income based, check with your local IRS office or a qualified tax consultant to find out how much you’re eligible for.
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Step 4
Claim deductions on tuition and other education fees. Students, spouses or parents who claim the student as a dependant can claim as much as $4,000 in tax breaks. Not only is tuition included in this tax break, but book fees and other items as well, as long as the books or items were required for education and were purchased from the university or college.
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Step 5
Get tax breaks when your employer pays for education. If your employer pays for continuing education, students can claim up to $5,250 for the year. Tuition, books and other education related material can be included.
