Life throws many challenges at you. If you are raising children while trying to earn a degree, there’s no denying your plate is full. You may not have time to research all the tax breaks that exist for someone in your circumstances. Here are five important credits and deductions that you can use now.
1. The Child Tax Credit – The Child Tax Credit is a benefit worth $2,000 for each qualifying dependent you claim. It is partially-refundable up to $1,400. To qualify, dependents must be younger than 17 and possess a Social Security number. If your child does not qualify for the $2,000, they may still qualify for a $500 non-refundable Credit for Other Dependents.
2. Student Loan Interest Deduction – As long as you meet the requirements, you can deduct up to $2,500 for interest paid on your student loans. The deduction is an adjustment to income, so you can claim it even if you don’t itemize your deductions. Learn more about the deduction and eligibility requirements here.
3. The Lifetime Learning Credit – This tax credit is a great benefit for part-time and returning students. It is worth up to $2,000 per year that you are in classes. There is no limit to the number of years you can claim it, and there is no minimum enrollment requirement.
4. Child and Dependent Care Credit – You could receive a credit to cover 20-35% of your childcare costs. The actual percentage will depend on your income. The total allowable credit is worth up to $3000 for one dependent ($6,000 total per family if you have two or more dependents). To qualify for the credit, you must be earning income or seriously looking for employment, or be a full-time student. Learn more about this credit and the requirements here.
5. Earned Income Tax Credit – The EITC is a refundable tax credit for low to moderate-income taxpayers. You must have some earned income from an employer or your own business to be eligible – such as a part-time job while attending school. The amount of the credit depends on your adjusted gross income and the number of children you claim as dependents. You can find out if you qualify for this tax credit through the EITC Assistant on the IRS website.
As a parent and a student, you’ve got options when you file your taxes. Choose the one that is right for you. Then let TaxSlayer find all the breaks you deserve for your maximum possible refund – guaranteed.
This post has been updated for tax year 2019 (returns filed in 2020).