If you’re anything like me, you want to know how much of a credit you will have for education expenses. The Lifetime Learning Tax Credit has it limits and here they are.
Lifetime Learning Tax Credit Limits
If your modified adjusted gross income is between $48,000 and $58,000 (filing single) or between $96,000 and $116,000 (if you file a joint return) you can claim a credit. If your modified adjusted gross income is more than $58,000 (filing single) or more than $116,000 (filing a joint return) you cannot claim an education credit.
Hope Credit Limits
The maximum amount of Hope credit you can claim is $1,800 per student. Now the amounts change if you live in one of the Midwestern disaster areas. If you happen to live in a disaster area, the amount changes to $3,600 per student.
Disaster Areas
Of course you’re wondering if you qualify for the disaster area zone. The following rules only apply to students attending an eligible educational institution in the Midwestern disaster areas. This applies to the states of Arkansas, Illinois, Indiana, Iowa, Missouri, Nebraska, and Wisconsin. You will have to visit the IRS for a complete list of areas in Publication 970.
Credit for Each eligible Student
100% of the first $1,200 (filing single) you spend. ($2,400 in a Midwestern disaster area) Keep in mind, the student has to be eligible and the expenses have to be qualified. Now the next credit comes after you spend the next $1,200. You can claim 50% of that amount. For Midwestern disaster areas you can claim $2,400. Like I said before, check with the IRS to be sure your particular county and state qualify for the disaster area status.
If you want to calculate all of this information in an income tax return software program, I recommend TurboTax Online. The Lifetime Learning Tax Credit Limits can easily be understood using their software. You and I know how the laws and amounts change from year to year. I’m sure you want the latest knowledge about the educations credits. Give Turbo Tax a try today. They guarantee the largest credit possible. As we finance our kids through school we need all the help we can get!