Put Your Taxes Back in Your Pocket
In our previous chart entries (here and here) we explored the primary tax breaks available to students and their families: the American Opportunity Tax Credit (AOTC), the Lifetime Learning Credit (LLC) and the deduction available for tuition and fees.
Now here’s a word of advice. In regards to taxes, anytime you see the word “credit” sit up and take note. A credit is a dollar-for-dollar discount from your tax bill for funds placed elsewhere. In other words, a credit is the opportunity to take money that you owe Uncle Sam or the state and redirect it for some other purpose. If that purpose is in line with something you already want to do it makes all the sense in the world to take advantage of it. Either way you must spend the money, so why not spend it to your benefit?
This brings us to a Tip of the Week: Put your taxes back in your pocket. In other words, don’t pay tuition and taxes if you don’t have to.