I probably don’t have to tell you that the cost of higher education is growing in leaps and bounds. The Lifetime Learning Tax Credit is one way to cut the cost a bit. 

They say higher education is the pillar upon which a successful and vibrant society is built. Given this, it has to be somewhat worrying that the cost of heading off to college in our country is becoming so obscene. In our capitalist economy, there isn’t much that can be done about it, but the government has tried by providing the Lifetime Learning Tax Credit.

What is the Lifetime Learning Tax Credit? As the name suggests, it is a tax credit to help counter the cost of college. It does this by giving you a break on your taxes. People complain about losing tax deductions all the time, but the truth is most tax deductions are the equivalent of rain drops in a hurricane. If you really want to save money, tax credits are the way to go. 

Why is this? The answer is simple. A tax credit is deducted dollar for dollar from the amount of tax you owe Uncle Sam. Let’s assume you do your taxes this year. Turbo Tax reports you owe $5,500 to the Feds. Ah, but you purchased a new hybrid this year that came with a $1,500 tax credit. Well, now you owe the Feds $4,000. This is much more powerful than a tax deduction that is just used to reduce your gross income. 

The “LLTC” is in the amount of $2,000 per eligible student. You can claim it for dependents going to college. The exact amount of the credit is determined by totaling up the accepted expenses. These include tuition, textbook costs, supplies and so on. Given the cost of college these days, you should easily be able to hit the $2,000 cap. 

Is the Lifetime Learning Tax Credit the answer to the high cost of college? Not a chance. That being said, at least you should end up getting a refund on your taxes this year. Enjoy it. Tuition is due soon!