Frank L. Zerjav, Sr., CPA, is a respected presence in the business community of St. Louis County, Missouri, where he guides Advisory Group Associates’ Tax & Advisory firms. One of the areas in which Frank L. Zerjav, Sr., CPA, and his team have extensive experience is federal tax breaks and incentives designed to enable education payments.
Prominent among these tax incentives is the American Opportunity Tax Credit, which offers a $2,500 credit each year for a maximum of four years of postsecondary education. In addition, the Lifetime Learning Credit covers 20 percent of as much as $10,000 in educational fees and costs throughout a year. An above-the-line higher education deduction is also available for qualified educational expenses, including tuition. Taken together, these tax benefits can be substantial, depending on the student’s adjusted gross income.
Taxpayers should also be aware of Coverdell education savings accounts, which offer a savings format similar to IRAs and allow savings for all types of educational expenses, from elementary school through college. These tax-advantaged distributions can be allocated for everything from tuition to room and board.