Individuals may have many goals related to higher education for themselves and their family. Meeting these goals can have a lot of expenses connected to it, particularly in today’s world where higher education costs can be quite high.
So, it can be important to be aware of what sources of financial relief one might have access to in relation to such expenses. One form of relief a person might have available are certain tax benefits. In U.S. tax law, there are two main tax credits for higher education expenses.
These two credits are the Lifetime Learning Credit and the American Opportunity Tax Credit. These credits are for qualifying higher education expenses one pays for oneself, one’s spouse or a dependant. There are various differences between the two credits. The maximum size of the credit is higher for the American Opportunity Tax Credit, but that credit also has more limits on what sorts of education expenses qualify a person for it. As a note, a person is not allowed to claim both of these credits, in the same year, for the same cost or the same student.
Like all tax credits, the two education expense tax credits have a range of important rules connected to them. Being accused of not following these rules and thus claiming credits one didn’t qualify for could put a person in a situation in which a lot of things could be in danger for them. This includes their higher education goals.
Depending on what ends up happening in them, disputes with the IRS over the claiming of a tax credit could have major financial ramifications for a person. A vast change in their financial circumstances could make it so a person is no longer able to afford education services they desire for themselves or their family.
So, when a person is in tax credit disputes with the Internal Revenue Service, such as disputes related to education tax credits, getting an experienced tax attorney’s guidance on what measures they can take in the dispute to try to best protect their goals (such as goals related to education) can be important.
Source: Internal Revenue Service, “Learn about Tax Benefits for Education,” Aug. 28, 2017