The IRS offers two important tax credits for higher education expenses: the American Opportunity Tax Credit (AOTC) and the Lifetime Learning Credit (LLC). You may claim both credits on the same tax return, but not for the same person. For example, you might claim the AOTC for your college-age dependent children and the LLC for your spouse.
If two or more members of your household are enrolled in qualifying post-secondary education programs, you may be able to claim multiple AOTCs. The LLC, on the other hand, may only be claimed once per return. The biggest advantage of the LLC is that you may use it an unlimited number of times for the same person over the years. By contrast, a student can qualify for the AOTC a maximum of four times in a lifetime.
In addition, although the AOTC offers a larger maximum credit and higher income limits than the LLC, it places more restrictions on the student's enrolment status and the nature of the educational program. A qualified tax advisor can help you determine which combination of these credits will serve your family best.
For you to claim a full $2,500 AOTC credit, your modified adjusted gross income, or MAGI, must be $80,000 or less for an individual or $160,000 or less for a married couple filing jointly
For you to claim the $2,000 LLC credit your modified adjusted gross income, or MAGI, must be between $55,000 and $65,000 for an individual or $131,000 or less for a married couple filing jointly
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