The IRS offers a number of education-related tax credits to help make higher education more affordable. One of these is the American Opportunity Tax Credit (AOTC).
What Is the AOTC?
The AOTC is a tax credit that can be claimed for the first four years of higher education. While higher education very often means college/undergraduate education, this credit can be claimed for any student pursuing a degree or other recognized education credential at a qualified educational institution.
Who Can Claim the AOTC?
You can claim the AOTC for any student in your tax household who is pursuing their first, second, third, or fourth year of higher education. This means that, if applicable, you could claim the AOTC for:
- Your spouse (if filing jointly)
- Your dependent(s)
If more than one person in your tax household is eligible, you can claim the AOTC for each individual student.
How Much Can You Claim?
The exact amount that you can claim will depend on how much you’ve spent on qualified educational expenses. You can claim up to $2,500 per student with the AOTC, though, which can lead to big savings at tax time!
Where Can You Find More Info?
Before you claim the AOTC, it’s important to make sure you understand all of the requirements and limitations related to this credit. The team at Taxation Solutions, Inc. is here to help you navigate all of those elements. We provide comprehensive tax guidance and preparation for clients in Austin and the surrounding area. Call us today to find out how we can help you make the most of the AOTC.