Lifetime Learning Tax Credit – Expenses That Qualify

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The Lifetime Learning Credit is for those who attend college classes. It allows them to get a 20% tuition expenses credit with a phase out limit of $2,000 in tax credits on their first $10,000 of Save for College - Calculator for Education Savings Investmenttuition expenses.

This credit is for you, your spouse, or your dependents that are in an eligible school and you had to pay the expenses for them. It differs from the American Opportunity Credit because you do not have to be in the first four years of undergraduate classes. People who have just taken one class can qualify for this credit.

Educational Institutions that Qualify

Accredited schools are considered eligible. Additionally, post-secondary schools and vocations schools qualify too. If the school accepts federal student aid programs via the US Department of Education, you can claim the Lifetime Learn tax credit for the tuition that you paid.

Expenses That Qualify

Expenses that are eligible for this credit include the fees and tuition that were paid for schooling. However, anything outside of that such as health, insurance, room and board, books, etc. are not eligible for the credit.

Additionally, you have to be the person who is responsible for covering the cost. You also have to reduce your qualifying expenses by the amount of assistance you received from various things such as grants or reimbursements. If you borrowed money such as from a student loan, you do not have to include this.

Who Is Eligible for This Credit

If you have a dependent child in college, you can claim this credit on your federal tax return. However, if your college student is not considered your dependent they are the ones who claim the credit on their federal tax return. In the event that you do not have a dependent but you pay their college expenses you are not eligible for the tax credit.

Income Limitations on the Credit

The Lifetime Learning Credit does phase out. However, if your AGI is lower than the phase out your credit will not be reduced. If you are in the middle-income range, you can expect it to be reduced. Additionally, if your income passes the phase out range you cannot claim the credit.

2014 Phase Out Periods

$54,000 to $63,000 – Applicable to those who file single, head of household or qualifying widow

$108,000 to $128,000 – Applicable to those who file married filing jointly

2013 Phase Out Periods

$53,000 to $63,000 – Applicable to those who file single, head of household or qualifying widow

$107,000 to $127,000 – Applicable to those who file married filing jointly

2012 Phase Out Periods

$52,000 to $62,000 – Applicable to those who file single, head of household or qualifying widow

$104,000 to $124,000 – Applicable to those who file married filing jointly

Closing Thoughts

Taxpayers could get $4,000 if they earned under $65,000 and under $130,000 for couples. However, if your income is between $65,000 and $80,000 or $130,000 and $160,000 for couples the maximum amount you will receive is $2,000.

If you file with Turbo Tax, they will make sure you get the maximum amount of money possible. This results in you receiving your largest refund ever!

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