In a tough economy with rising tuition costs, deciding how to pay for your child's higher education expenses can seem daunting. To help reduce the total costs associated with higher education, we have listed opportunities that may be available to reduce these expenses.
If your child is currently enrolled in post-secondary education, it’s not too late! You may consider . . .
- American Opportunity Credit
- Lifetime Learning Credit
- Education Expenses Deduction
- Employer provided education assistance program
- Traditional and Roth IRA distributions
If you’re planning for future education expenses, you may consider . . .
- Section 529 Prepaid Tuition Plan
- Section 529 Education Savings Account
- Coverdell Education Savings Account
- Savings bonds
Other options include deducting interest from student loans, excluding scholarships, from gross income, or gift tax exclusion if paid directly to an educational institution.
Find more details on higher education tax benefits in our College Education Tax Credit Table download the Excel spreadsheet
This article and table were co-suthored by Lara Budmats, Alex Berta, Sarah Brett, Brendan Kinkopf, and Sherryl Lindish.