Tax season can feel a bit scary, especially when you're dealing with student loans and rent. But guess what? There are actually some tax breaks that could put some serious cash back in your pocket.
Don't let these deductions and credits slip through your fingers take advantage of them while you can:
- The Earned Income Tax Credit (EITC) - This credit is a big deal for those with moderate to low incomes. It's designed to supplement your earnings, and the amount you can claim depends on your income.
- American Opportunity Tax Credit (AOTC) - If you're still in your first four years of college the AOTC can offer some serious tax relief. It covers qualified education expenses like tuition, fees, and books
- Lifetime Learning Credit (LLC) -The LLC can help with expenses related to continuing education, whether it's for a degree or just a few courses
- Saver's Credit -designed to incentivize retirement savings, especially for those with lower to moderate incomes.
- Student Loan Interest Deduction - You can deduct the interest you paid on qualified student loans, up to a certain limit.
Bottom Line: Don't leave money on the table. Understanding these tax breaks can significantly improve your financial health.
Sources:
Earned income tax credit (EITC). Internal Revenue Service. (n.d.-a). https://www.irs.gov/credits-deductions/individuals/earned-income-tax-credit-eitc
Education credits - AOTC and LLC. Internal Revenue Service. (n.d.-b). https://www.irs.gov/credits-deductions/individuals/education-credits-aotc-and-llc