If you’re anything like me, you want to know how much of a credit you will have for education expenses. Any person who takes college classes can take the Lifetime Learning Credit. The Lifetime Learning Credit is a tax credit of 20% of tuition expenses, with a maximum of $2,000 in tax credits on the first $10,000 of college tuition expenses.
Claim the Lifetime Learning Credit on your tax return by filing your tax return with TurboTax Online. If you, your spouse, or your dependents are enrolled at an eligible educational institution and you were responsible for paying college expenses, then you can claim the tax credit.
Lifetime Learning Tax Credit Limits
The Lifetime Learning credit has a phase out range. Your credits are not reduced if your adjusted gross income is below the phase out range which means you can claim the full credit. Your credits will be reduced if you’re in the middle of the phase out range. You will not be eligible to claim the Lifetime Learning credit if your income goes above the phase out range.
The Lifetime Learning Tax Credit Limits for 2011:
•$51,000 to $61,000 : Single, Head of Household, or Qualifying Widow
•$102,000 to $122,000 : Married Filing Jointly
The Lifetime Learning Tax Credit Limits for 2012:
•$52,000 to $62,000 : Single, Head of Household, or Qualifying Widow
•$104,000 to $124,000 : Married Filing Jointly
Hope Credit Limits
The maximum amount of Hope credit you can claim is $2,500 per student. The tax form that you use for the Hope Credit is IRS Form 8863. You cannot claim the Hope Credit and the Lifetime Learning credit in the same tax year for the same student.
Of course you’re wondering if you qualify for the disaster area zone. The following rules only apply to students attending an eligible educational institution in the Midwestern disaster areas. This applies to the states of Arkansas, Illinois, Indiana, Iowa, Missouri, Nebraska, and Wisconsin. You will have to visit the IRS for a complete list of areas in Publication 970.
Credit for Each eligible Student
100% of the first $1,200 (filing single) you spend. ($2,400 in a Midwestern disaster area) Keep in mind, the student has to be eligible and the expenses have to be qualified. Now the next credit comes after you spend the next $1,200. You can claim 50% of that amount. For Midwestern disaster areas you can claim $2,400. Like I said before, check with the IRS to be sure your particular county and state qualify for the disaster area status.
If you want to calculate all of this information in an income tax return software program, I recommend TurboTax Online. The Lifetime Learning Tax Credit Limits can easily be understood using their software. You and I know how the laws and amounts change from year to year. I’m sure you want the latest knowledge about the educations credits. Give Turbo Tax a try today. They guarantee the largest credit possible. As we finance our kids through school we need all the help we can get!