With schools back in session, the IRS has issued a reminder to taxpayers not to overlook available tax credits for education expenses. Tax credits are applied directly against the income tax you owe. There are two available credits: the American Opportunity Tax Credit and the Lifetime Learning Credit. The American Opportunity Tax Credit can be up to $2,500 annually for an eligible student and is 40% refundable. That means you could get money back when the credit exceeds your tax bill. The maximum Lifetime Learning Credit is $2,000 and is not refundable. You can claim only one type of education credit per student each year.
