Tuition and Fees Deduction 2023: How many discounts can you get?

College is not cheap. However, depending on your circumstances, you may be able to deduct all or part of your tuition expenses when you file your tax return.

Because the tax code includes several education tax credits for higher education costs, you’ll want to understand how they work to make sure you get the most out of your tax advantages

Is the deduction for college tuition and fees still available?

As of December 31, 2020, the deduction for college tuition and fees is no longer available. Other deductions, such as the American Opportunity Tax Credit and the Lifetime Learning Credit, may help you pay for college.

Can tuition fees be deducted?

Parents can deduct the tuition fees they pay for their children’s education, allowing them to save taxes even if they have no other tax-saving options. Parents can claim the exact fees they paid in a given tax year.

What is the American Opportunity Tax Credit?

The American Opportunity Tax Credit for 2023 taxes is as follows: Up to $2,500 per student can be claimed, calculated as 100% of the first $2,000 in college costs and 25% of the next $2,000 in college costs. It can be used for both tuition and fees and necessary course materials (books, supplies and equipment).

Section 80C Tuition Fee Tax Deduction

Lifetime Learning Credit.

This credit allows you to claim a credit of up to $2,000 in qualified educational expenses. As a credit, this money is nonrefundable, but you can reduce the amount you owe in taxes.

If you are an eligible student at an accredited college or university, you may qualify for this credit. To qualify, you can’t get more than $60,000 in modified adjusted income if you file as single, head of household, or widowed. If you are married filing jointly, your modified adjusted gross income must not exceed $130,000.

Unlike the American Opportunity credit, there is no limit on the number of years you can claim it. However, you cannot claim the Lifetime Learning and American Opportunity credits at the same time. You also cannot claim this credit while deducting fees and tuition. You are not eligible for this credit if you are a dependent or if you are married filing separately.