ArtsAutosBooksBusinessEducationEntertainmentFamilyFashionFoodGamesGenderHealthHolidaysHomeHubPagesPersonal FinancePetsPoliticsReligionSportsTechnologyTravel

The American Opportunity Tax Credit

Updated on July 30, 2015

Help defray the cost of college

Are you the parent of children in college? Do you want to save on taxes? Then this hub has been written with you in mind. If your adjusted gross income is less than 160,000 dollars married or 80,000 dollars single you as a United States taxpayer would be well served by taking advantage of the American Opportunity Tax Credit. Even if your income exceeds those amounts listed please read on.

What does this credit do for you? Assuming your student is a dependent (which may include yourself) you may take the first 2000 dollars of tuition and required course materials as a full tax credit. The second 2000 dollars is taken at a 25 percent tax credit, meaning you may receive a 2500 dollar tax credit for the first 4000 dollars of tuition and course related materials. College is not cheap these days and 2500 dollars will go a long way towards paying for school.

To qualify the student must be enrolled at least a half time student as defined by the institution of higher learning.

Most colleges tuition bills in the United States are going to exceed 4000 dollars however if they do not you may deduct required course materials which includes textbooks, software and perhaps even a computer. You will defiantly want to keep your receipts as with all tax issues. .


The American Opportunity Tax Credit

Look for every honest deduction

If your income is near or above the upper limits investigate the following to reduce your adjusted gross income.

Contributions to your 401K or 403B will reduce your adjusted gross income. You may contribute up to 16,500 dollars unless you are over 50. Over the age of 50 you allowed to contribute 22,000 dollars. Two working spouses over 50 can contribute a handsome 44,000 dollars.

Contribute the maximum to you health savings account. The maximum per employee is 6150 dollars or 7150 dollars for those over the age of 55.

Other expenses to reduce your adjusted gross income include but are not limited to:

Alimony

Penalties on early withdrawal of saving

Student loan interest

Some business expenses

Contributions to a traditional IRA

The United States tax code is very complex. Not every deduction is listed here.

Take some time to investigate other methods to reduce your adjusted gross income as they may apply to you. The American Opportunity Tax Credit is a good deal for those who qualify. Don’t pass it up.

The American Opportunity Tax Credit

Are you taking advantage of the American Opportunity Tax Credit?

See results

Comments

    0 of 8192 characters used
    Post Comment
    • Daddy Paul profile imageAUTHOR

      Daddy Paul 

      7 years ago from Michigan

      Bob

      You really need a tax expert.

    • profile image

      Bob 

      7 years ago

      Can military personal who receive the Illinois veterans grant (TA paid for full) and MGIB get this?

      Nobody on my campus knows this answer.

    • mulberry1 profile image

      Christine Mulberry 

      9 years ago

      All advice on how to reduce some of these expenses and help with taxes is great. Thanks for sharing.

    • Sandyspider profile image

      Sandy Mertens 

      9 years ago from Wisconsin, USA

      Thanks for the advice.

    • Susan Carter profile image

      Susan Carter 

      9 years ago

      Thanks for the advice. My daughter is past the dependent age so I can't help her this way while she's in college, but please keep passing on any more advice you have to help parents assist their kids.

    working

    This website uses cookies

    As a user in the EEA, your approval is needed on a few things. To provide a better website experience, hubpages.com uses cookies (and other similar technologies) and may collect, process, and share personal data. Please choose which areas of our service you consent to our doing so.

    For more information on managing or withdrawing consents and how we handle data, visit our Privacy Policy at: https://hubpages.com/privacy-policy#gdpr

    Show Details
    Necessary
    HubPages Device IDThis is used to identify particular browsers or devices when the access the service, and is used for security reasons.
    LoginThis is necessary to sign in to the HubPages Service.
    Google RecaptchaThis is used to prevent bots and spam. (Privacy Policy)
    AkismetThis is used to detect comment spam. (Privacy Policy)
    HubPages Google AnalyticsThis is used to provide data on traffic to our website, all personally identifyable data is anonymized. (Privacy Policy)
    HubPages Traffic PixelThis is used to collect data on traffic to articles and other pages on our site. Unless you are signed in to a HubPages account, all personally identifiable information is anonymized.
    Amazon Web ServicesThis is a cloud services platform that we used to host our service. (Privacy Policy)
    CloudflareThis is a cloud CDN service that we use to efficiently deliver files required for our service to operate such as javascript, cascading style sheets, images, and videos. (Privacy Policy)
    Google Hosted LibrariesJavascript software libraries such as jQuery are loaded at endpoints on the googleapis.com or gstatic.com domains, for performance and efficiency reasons. (Privacy Policy)
    Features
    Google Custom SearchThis is feature allows you to search the site. (Privacy Policy)
    Google MapsSome articles have Google Maps embedded in them. (Privacy Policy)
    Google ChartsThis is used to display charts and graphs on articles and the author center. (Privacy Policy)
    Google AdSense Host APIThis service allows you to sign up for or associate a Google AdSense account with HubPages, so that you can earn money from ads on your articles. No data is shared unless you engage with this feature. (Privacy Policy)
    Google YouTubeSome articles have YouTube videos embedded in them. (Privacy Policy)
    VimeoSome articles have Vimeo videos embedded in them. (Privacy Policy)
    PaypalThis is used for a registered author who enrolls in the HubPages Earnings program and requests to be paid via PayPal. No data is shared with Paypal unless you engage with this feature. (Privacy Policy)
    Facebook LoginYou can use this to streamline signing up for, or signing in to your Hubpages account. No data is shared with Facebook unless you engage with this feature. (Privacy Policy)
    MavenThis supports the Maven widget and search functionality. (Privacy Policy)
    Marketing
    Google AdSenseThis is an ad network. (Privacy Policy)
    Google DoubleClickGoogle provides ad serving technology and runs an ad network. (Privacy Policy)
    Index ExchangeThis is an ad network. (Privacy Policy)
    SovrnThis is an ad network. (Privacy Policy)
    Facebook AdsThis is an ad network. (Privacy Policy)
    Amazon Unified Ad MarketplaceThis is an ad network. (Privacy Policy)
    AppNexusThis is an ad network. (Privacy Policy)
    OpenxThis is an ad network. (Privacy Policy)
    Rubicon ProjectThis is an ad network. (Privacy Policy)
    TripleLiftThis is an ad network. (Privacy Policy)
    Say MediaWe partner with Say Media to deliver ad campaigns on our sites. (Privacy Policy)
    Remarketing PixelsWe may use remarketing pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to advertise the HubPages Service to people that have visited our sites.
    Conversion Tracking PixelsWe may use conversion tracking pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to identify when an advertisement has successfully resulted in the desired action, such as signing up for the HubPages Service or publishing an article on the HubPages Service.
    Statistics
    Author Google AnalyticsThis is used to provide traffic data and reports to the authors of articles on the HubPages Service. (Privacy Policy)
    ComscoreComScore is a media measurement and analytics company providing marketing data and analytics to enterprises, media and advertising agencies, and publishers. Non-consent will result in ComScore only processing obfuscated personal data. (Privacy Policy)
    Amazon Tracking PixelSome articles display amazon products as part of the Amazon Affiliate program, this pixel provides traffic statistics for those products (Privacy Policy)