If you are raising children and earning a degree, there are several tax breaks available to you. Here is a quick look at the top five breaks that could save you money on your taxes and increase your tax refund.
1. The Child Tax Credit (CTC)
Parents with dependents age 16 and under can receive up to $2,000 per qualifying child. Dependents age 17 and older are not eligible for the Child Tax Credit, but they may qualify for a $500 Credit for Other Dependents.
The CTC is partially refundable for up to $1,500 for each qualifying dependent. To qualify, dependents must be younger than 17 and have a Social Security number. Learn more about these two credits here.
2. Student Loan Interest Deduction
If you meet the requirements for this deduction, the IRS allows you to write off up to $2,500 for interest paid on your student loans. To be eligible for the deduction, these things must be true:
- Your modified adjusted gross income is under $70,000 (or under $140,000 if married filing jointly.
- No one claims you as a dependent for taxes
- You are legally required to pay interest on a qualified student loan
- You paid interest on the qualified student loan
- Your filing status is not married filing separately
The deduction is an adjustment to income, so you can claim it even if you don’t itemize your deductions.
Learn more about the student loan interest deduction 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. The exact amount you can claim will be based on how much you paid for qualified education expenses (school tuition, enrollment fees, etc.).
The Lifetime Learning Credit is different from other education credits because there is no limit to the number of years you can claim it, and there is no minimum enrollment requirement. So, even if you are only taking a few credits per semester, you may still qualify for this benefit.
4. Child and Dependent Care Credit
This tax credit is worth up to 35% of your childcare costs. The exact percentage will depend on your income. The maximum credit you could receive is $3,000 for one dependent (or $6,000 for more than one qualified dependent). To qualify, you must be a full-time student, earning income, or seriously looking for employment.
Learn more about the Child and Dependent Care Credit 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. You can find out if you qualify for this tax credit through the EITC Assistant on the IRS website.
The amount you’ll receive in tax credit depends on your adjusted gross income and the number of children you claim as dependents. For tax year 2022, you can receive a maximum of $6,935 if you have three or more qualifying children; $6,164 for two qualifying children; and $3,733 for one qualifying child.
As a parent and a student, it’s important to find the tax filing solution that’s right for you. Let TaxSlayer help you find all the breaks you deserve for your maximum refund guaranteed.
This article was last updated on 12/14/2022.