As college costs rise due to inflation, these three tax breaks may be beneficial.
In the face of rising inflation and other pressures, some colleges are raising tuition by up to 5%.
Meanwhile, 529 college savings plans may have lower balances as a result of stock market losses and rising interest rates.
1. Tax credit for undergraduates :- You can claim 100% of the first $2,000 in costs per student and 25% of the next $2,000 for a total credit of $2,500 per student.
Furthermore, up to $1,000 is refundable, which means you can claim a portion of the benefit even if you have no tax liability.
2. Tax credit for graduate and professional degrees :- You can withdraw 20% of the first $10,000 in qualified education expenses. Although the credit is not refundable.
3. Claim a tax break for working :- Students are eligible for the earned income tax credit, which is a refundable deduction for low- to moderate-income workers.
If they can afford to save some of their earnings, they may also take the retirement savings contributions credit