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Tax Breaks and Deductions Every Student Should Claim - CCCU

 Tuesday, March 31    CCCU
Tax Breaks and Deductions Every Student Should Claim - CCCU

Oregon tax breaks and benefits every student should know about


Need help filing your student taxes? From the American Opportunity Tax Credit to work-related education deductions, here are a few deductions and credits every student should claim on their taxes.
 
If you’re like most college students, you’re probably used to being frugal with your money. Whether it’s finding the most affordable place to rent or figuring out the cheapest way to eat, college is often a time for pinching pennies. One silver lining is that students can take advantage of various tax deductions and credits.
 
Do you think you might qualify for a few benefits but aren’t quite sure how to go about filing taxes as a student in Oregon? If so, you’ve come to the right place. CCCU’s Portland credit union members come from all walks of life, including those attending college. We’re dedicated to helping all our members make the best financial decisions. Here are the top five Oregon tax breaks and benefits for students.


American Opportunity Tax Credit


Tax credits can decrease the amount of money you owe when you file your return. The American Opportunity Tax Credit (AOTC) is intended to make up for some of the educational expenses that college students face. It caps at $2,500, and in some instances, the AOTC can reduce the amount of taxes owed to $0. If that’s the case for you, you might be able to get a 40% refund of any remaining amount from the credit.


Students who qualify for the American Opportunity Credit have to:

 
In order to write off your student expenses, the costs must have been paid by you or your spouse. If your dependent is a student and you cover their expenses, you can write that off as well.
 
Additionally, students who completed their degree or education program at the beginning of the tax year aren’t eligible for the AOTC. Lastly, you can only claim the credit up to four tax years.


Lifetime Learning Credit


Those who don’t qualify for the AOTC might be able to claim the Lifetime Learning Credit on their student taxes. This tax credit is for costs associated with all post-secondary education, including undergraduate, graduate, and post-grad courses. Expenses you can claim include tuition, enrollment fees, books, course materials, school supplies, and equipment.
 
With the Lifetime Learning Credit, eligible students can get a credit of up to $2,000 per tax year. It’s calculated as 20% of your first $10,000 in educational expenses. This tax credit is non-refundable, so you won’t be paid back if the amount you owe is reduced to $0 like the AOTC. It just decreases how much you owe in taxes. Also, there’s no minimum course load to qualify and no limit to how many years you can claim it.


Student loan interest deduction


The student loan interest deduction is a federal tax break for former students. It allows you to deduct up to $2,500 of student loan interest you paid the previous year from your total taxable income.
 
To qualify for this tax deduction, the student loan has to be under your name, your spouse’s name, or your dependent’s name. (If your parent or other beneficiary is helping you repay your student loans, they can’t claim the tax deduction.) Also, the loan has to be for an academic period in which you were enrolled at least half-time to pursue a degree or professional certificate.


Work-related education deduction


If you took a course or enrolled in college classes to improve or maintain your job skills, you can also deduct qualified expenses associated with your education. In some cases, workers are required by their employer or the law to maintain a position or a professional license.
 
You can deduct itemized work-related education costs up to 2% of your adjusted gross income. This deduction is available to taxpayers for an unlimited number of years.


Bank with our Portland credit union at every stage of life


Whether you’re a current college student, a recent grad, or several years into your career, Consolidated Community Credit Union is here to help you make the most of your finances at every stage of life. We offer a broad range of personalized banking options, including checking, savings, and low-interest credit card accounts.
 
Join our Portland credit union today, or get in touch with us to learn more about what we offer.


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