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Eligible Educational Tax Breaks

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American Opportunity Tax Credit (AOTC)

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Covers up to 2,500ofqualifyingeducationalexpensesperstudent,suchastuition,fees,andcoursematerialsneededforenrollment.1002,500 of qualifying educational expenses per student, such as tuition, fees, and course materials needed for enrollment. 100% of the first 2,000 and 25% of the next 2,000ofqualifiedexpensesarecredited.2,000 of qualified expenses are credited.

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Lifetime Learning Credit (LLC)

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Up to 2,000creditpertaxreturn.Itcoverstuitionandfees,books,supplies,andequipmentrequiredforenrollmentorattendanceataneligibleeducationalinstitution.Thecreditisworth202,000 credit per tax return. It covers tuition and fees, books, supplies, and equipment required for enrollment or attendance at an eligible educational institution. The credit is worth 20% of the first 10,000 of qualified education expenses.

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Tuition and Fees Deduction

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Deduction of up to 4,000fromyourtaxableincomefortuitionandfeesforhighereducation.Thedeductionisavailableforqualifiededucationexpensespaidforaneligiblestudentsenrollmentorattendanceataneligibleeducationalinstitution.4,000 from your taxable income for tuition and fees for higher education. The deduction is available for qualified education expenses paid for an eligible student's enrollment or attendance at an eligible educational institution.

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Student Loan Interest Deduction

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Allows you to deduct up to 2,500oftheinterestpaidonyourstudentloansduringthetaxyear.Thedeductiongraduallyphasesoutbasedonyourmodifiedadjustedgrossincome.2,500 of the interest paid on your student loans during the tax year. The deduction gradually phases out based on your modified adjusted gross income.

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529 College Savings Plan

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Earnings in a 529 plan grow federal tax-free and will not be taxed when the money is taken out to pay for college. Contributions are not deductible on your federal tax return.

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Coverdell Education Savings Account (ESA)

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Tax-advantaged investment account for educational expenses, including K-12 expenses. Contributions are made with after-tax dollars, but earnings grow tax-free, and withdrawals for qualified education expenses are also tax-free.

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Education Savings Bond Program

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Interest earned on series EE or I savings bonds issued after 1989 may be tax-free if used for qualified education expenses at eligible institutions. Income limits apply.

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Employer-Provided Educational Assistance

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Up to 5,250ofeducationalassistanceprovidedbyanemployercanbeexcludedfromyourincome.Thiscancovertuition,fees,books,supplies,andequipmentforyoureducation.5,250 of educational assistance provided by an employer can be excluded from your income. This can cover tuition, fees, books, supplies, and equipment for your education.

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Business Deduction for Work-Related Education

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If you're self-employed, you can deduct the costs of qualifying work-related education directly from your self-employment income. This includes tuition, books, supplies, laboratory fees, and similar items.

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Qualified Tuition Program (QTP)

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Also known as a 529 plan, allows for tax-free distributions for qualified higher education expenses, which might include tuition, fees, books, and room and board.

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