Today TaxMama hears from Mike in the Tax Parlor says, ” I was just wondering how the Hope Credit works. I am a Graduate Student and was disappointed that my refund was low (about $200 compared to previous years when it had been $500), so I was going through looking for things I missed. I remembered I had a 1098-T, which stated on line 2 that the “amounts billed for qualified tuition and related expenses” for this year was $10,000. So I put that in the Hope Credit section and it raised my refund by at least a few hundred dollars. But this was all paid by Student Loan money…
It seems to good to be true… Is this legit?”
It does sound so good, doesn’t it?
Well, you’re entitled to use the Hope Credit for more than one year. It’s worth up to $1,500 per student. You may use it for the first two years of college. You can read more about this here:
After that, you get the Lifetime Learning Credit. And you can use that for the rest of your life.
This is worth up to $2,000 per year, depending on your income level.
You can read more about the Lifetime Learning Credit here:
Since it’s worth up to 20% of the first $10,000 in qualified educational expenses – you’re apt to get some extra money!
And remember, you’ll find answers to lots of questions about education credits and other tax information, free. Where? At TaxMama.com[Note: If you were subscribed to the e-mailed TaxQuips, you’d be getting other exciting news and tips. Please click on the subscribe link and join us.]
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- Ask TaxMama :: Where taxes are fun and answers are free
- TaxTwist.com :: Where TaxQuips will be moving & You can add your comments
- IRS Publication 970 :: Hope Credit
- IRS FAQs :: Lifetime Learning Credit