Students: With tuition at some schools rising in the double digits, it's a crucial time to help students and parents handle the escalating costs.
To help soften the blow, the IRS is offering the American Opportunity credit, which can be claimed for 2009 or 2010 college tuition, text books and even computers.
The credit temporarily replaces the existing Hope Credit in order to help more taxpayers, including people who don't owe tax and those with higher incomes. If you're a student and your income is $80,000 or less, you can qualify for a credit of up to $2,500 a year, an increase of $700 from the previous Hope Credit.
"This is a great credit, especially with the cost of college so high today," said CPA Jerry Morphis. "It really helps lower income people, giving more Americans the opportunity for higher education."
In addition, students and parents can now claim the credit for four years of post-secondary education tuition instead of just two, and the credit can be applied to required course materials.
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