NEW YORK (MainStreet) —After having her first child, Deborah Harris, 32, decided to go back to school. She decided to pursue a master's degree in fashion, a subject she had loved since high school.
Even though her husband works and she attends school part-time, paying for college can get costly.
“It’s not a financial burden yet, but I can see it becoming one if I don’t get a job,” Harris says.
For the past four years, she has been taking classes online at the Academy of Art University in San Francisco. Harris is roughly $100,000 in debt, a result of both undergraduate and graduate school expenses.
Aside from getting a student loan interest tax form every year from her school, she wasn’t aware that she could deduct her education expenses on her tax return.
Harris is one of many taxpayers who either doesn’t know that tax breaks are available or forgets to file them.
In a 2009 IRS report, researchers found that tax filers didn’t always claim tax deductions that would maximize their benefits. The report showed that about 14% of filers failed to claim a credit or deduction.
On average, filers lost a tax benefit of $466, resulting in about $726 million dollars unclaimed in 2009.
“Lots of families aren’t aware that they can claim education costs,” says Mark Kantrowitz, publisher of finaid.org and fastweb.com, websites that provide student financial aid information. “Even if they are aware, they don’t know enough about these benefits, or that they could have claimed more.”
Take a look at five tax breaks that can help ease the burden of paying for a college education.
1. The American Opportunity tax credit (AOC) provides a tax credit of up to $2,500 per student based on the first $4,000 you spend for your college education, including tuition, fees and required course materials or equipment--but no room or board costs.