🎓 Back-to-School Tax Tips for 2025
- Abram Rice Financial
- Aug 1
- 2 min read
Starting a new school year can get expensive—but there are several tax breaks that can help you save money. Here’s what to know for your 2025 taxes:
1. Education Tax Credits
American Opportunity Tax Credit (AOTC):Get up to $2,500 per college student (first 4 years only).
Covers 100% of the first $2,000 in education costs, then 25% of the next $2,000.
$1,000 is refundable, so you might get cash back even if you owe no taxes.
Must be enrolled at least half-time; income limits apply.
Lifetime Learning Credit (LLC):Get up to $2,000 per return for any level of education or job-related courses.
No time limit on how many years you can claim it.
Nonrefundable (can reduce your tax bill but won’t give you money back).
Income limits apply.
2. Student Loan Interest Deduction
Deduct up to $2,500 in student loan interest from your income—even if you don’t itemize.
Income limits apply.
3. Educator Expense Deduction
K–12 teachers can deduct up to $300 for classroom supplies.
If married and both spouses are teachers, each can deduct $300.
4. Child Tax Credit (CTC)
Now up to $2,200 per child in 2025.
$1,700 of it is refundable.
Income limits and Social Security numbers are required.
5. 529 College Savings Plans
No federal deduction for contributions, but:
Earnings grow tax-free
Withdrawals for education are also tax-free
Covers tuition, books, supplies, and room & board.
You can give up to $19,000 per child without triggering gift taxes.
Some states offer additional tax breaks.
6. Pro Tips
Keep good records (forms 1098-T, 1098-E, receipts for books/supplies).
Use IRS Form 8863 to claim education credits.
Talk to a tax pro if you're not sure what you qualify for.
Take advantage of these breaks to reduce your tax bill and keep more money in your pocket this school year!
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