Students: Take Advantage of Higher Education Tax Benefits

By Catherine Groux
Posted June 19, 2012 11:09 AM

Many students do not fill out their tax forms efficiently.
Many students do not fill out their tax forms efficiently.
As the cost of college continues to rise, it is becoming more important for students and their families to understand the many opportunities they have to make earning an associate's or bachelor's degree more affordable. While most are aware of basic financial aid like scholarships and loans, many do not understand assistance such as higher education tax benefits.

According to a new U.S. Government Accountability Office (GAO) report, which analyzed 2009 Internal Revenue Service (IRS) data, about 14% of tax filers, or about 1.5 million people, did not take advantage of a higher education tax benefit they were eligible for. In failing to do so, most of these individuals lost an average of $466.

Still, the report shows that while many tax filers did apply for higher education benefits, some did not do so properly. For instance, almost 40% of people who took a tuition deduction in 2009 would have saved even more money if they claimed the Lifetime Learning Credit option instead.

Given the commonness of tax mistakes, the GAO feels it must partner with the IRS and the U.S. Department of Education (DOE) to give filers more information about tax benefits.

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