Ryan VaughnCOO of Incite Tax & Accounting. Ask me anything about your taxes.

Education Credit Short | Incite Tax #IRSsucks

17 Apr 2023 · 1 min

Watch on YouTube

1:00

In this brief YouTube short, the presenter outlines two U.S. education tax credits. The Lifetime Learning Credit offers a non‑refundable credit equal to 20 % of qualified post‑secondary expenses (tuition, books, supplies, equipment) up to $10,000, capping the credit at $2,000 and is available to both part‑time and full‑time students. The American Opportunity Credit provides a larger benefit for the first four years of post‑secondary study: it covers 100 % of the first $2,000 of expenses and 25 % of the next $2,000, for a maximum credit of $2,500 (requiring $4,000 of spending) and requires enrollment of more than half‑time. The speaker emphasizes the high cost of college and encourages viewers to claim these credits, ending with a casual jab that “the IRS sucks.”

Chapters

College is expensive. Eligible expenses we're talking about are tuition, books, supplies, and equipment that are required for those classes of anything that's post-secondary. So you have a Lifetime Learning Credit. It's 20% up to $10,000, so max of $2,000. You can be a part-time or full-time student. And this is a non-refundable credit. You could take that. There's the American Opportunity Credit. It is 100% of the first $2,000 you spend, plus 25% of the next $2,000 you spend. So it maxes out at $2,500 in credit, but you only need to spend $4,000. And you have to be more than part-time to claim it, and it's only for the first 4 years after post-secondary. So think freshman to senior. College is expensive, you might as well get some help with it. And of course, as always, we think the IRS sucks.