newtodaycare22 05:42 PM 01-20-2011
Does anyone know the benefits of deducting college tuition vs. applying the tax credits (I qualify for both, although their names are escaping me at the moment). I paid 6500 in tuition for the year, if that helps. Thanks!
TomCopeland 09:24 AM 01-21-2011
There are several education tax credits that you may qualify for: Lifetime Learning Credit, Hope Credit (eliminated in 2010) and American Opportunity Credit. You should use these tax credits if the classes are not related to your business or for classes taken by other members of your family. If you are taking classes related to your business it's better to claim them as a business expense rather than use these credits. This is because you are paying a higher tax rate on your business income vs personal income.
newtodaycare22 05:05 PM 01-21-2011
Hmm ok well, I'm not ONLY taking them because of the business, although it's definitely related. Many of the courses contribute to my required continuing education (for a child care business requirement), but overall I'm obtaining a Masters of Education.