Is a Student's Vocational Schooling Tax Deductible?
While many high school graduates continue their education at colleges or universities that allow them to earn four-year degrees and beyond, other students set their sights on careers that do not require as much schooling. Students who want to become dental assistants, hairstylists or office managers, for example, may choose a vocational school over a traditional college. These students are still eligible for tax advantages associated with higher learning.
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American Opportunity Credit
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The American Opportunity Credit replaced the Hope Credit after the 2008 tax year, allowing a more broad use of the tax credit by the American public. Taxpayers who qualify for the maximum credit can write off $2,500 per year per student. Even taxpayers who do not owe federal taxes can receive up to $1,000 in a federal tax refund from the tax credit. The full tax credit is available for individuals who earn less than $80,000 per year or married couples who earn less than $160,000 per year.
Lifetime Learning Tax Credit
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The Lifetime Learning Tax Credit allows students or parents to claim a credit of up to $2,000 ($4,000 in a Midwestern disaster area) for each tax year that the student participates in eligible schooling. There is no inherent limit on how many times students can claim the credit, provided that the student is still participating in vocational school or college.
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Student Loan Interest Deduction
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If a student in vocational school has taken out a student loan during the course of a tax year, he may be eligible to deduct up to $2,500 in interest. To qualify for this tax write-off, the student must have spent the loan money on qualifying expenses, such as tuition, supplies and other fees associated with being a student. Those who pay more than $600 a year in interest on student loans receive Form 1098-E from the financial institution from which they took the loan. This form includes information necessary to deduct interest expenses when filing taxes.
Deduct Tuition and Fees
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Taxpayers attending vocational school or who have a dependent in vocational school can decrease their taxable income by up to $4,000 per year when they pay for tuition and other related expenses. The expenses that are deductible for tax purposes must involve the registration or enrollment of a student in a vocational school.
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