Keep in mind: tax season for 2020 will be here soon!
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The tax code provides a variety of tax incentives for families who are paying higher education costs or repaying student loans. You may be able to claim an American Opportunity Credit (formerly called the Hope Credit) or Lifetime Learning Credit for the qualified tuition and related expenses of the students in your family (i.e. you, your spouse, or dependent) who are enrolled in eligible academic institutions. Different rules apply to each credit and the ability to claim the credit phases out at higher income levles.
You may be able to deduct interest you pay on a qualified student loan. The deduction is claimed as an adjustment to income so you do not have to itemize your deductions on Schedule A Form 1040. However, this deduction is also phased out at higher income levels.
If your student loan was canceled, you may not have to include any amount in income.
Monte R. Barnes, FTC Inc. is a financial, tax, and consulting firm serving clients throughout the San Antonio, TX dedicated to providing our clients with professional, personalized services and guidance in a wide range of financial and business needs.