GOBankingRates works with many financial advertisers to showcase their products and services to our audiences.
These brands compensate us to advertise their products in ads across our site.
This compensation may impact how and where products appear on this site.
Commitment to Our Readers
GOBankingRates' editorial team is committed to bringing you unbiased reviews and information.
you’re able to read more about oureditorial guidelinesand our products and servicesreview methodology.
20 YearsHelping You Live Richer
Reviewedby Experts
Trusted byMillions of Readers
Paying taxes is never fun.
Education Tax Breaks
Did you pay education costs last year?
You could be eligible for a tax break or two.
There are 529 plans and Coverdell Education Savings Accounts for tax-favored funding of future education expenses.
With a 529 plan, your contributions arent tax deductible, but they can earn interest.
it’s possible for you to use that money on qualified education expenses without paying federal tax.
A Coverdell education savings account is also meant for qualified education expenses.
Contributions arent tax deductible, but distributions are tax-free when used for education expenses.
Others education tax breaks include:
Income limits and other criteria apply.
This tax break works for upper-middle-class taxpayers, too.
Qualified Retirement Plan Contributions
Theres also a tax break for saving for retirement.
For example, you could get the Savers Credit for contributing to a 401(k).
This credit is up to $2,000 or $4,000 if married filing jointly.
Theexact credit amountdepends on your income.
Contributing to other accounts, like an IRA, could also get you a tax break.
Any contribution to a Traditional IRA is tax-deductible.
Annual contribution limits depend on the year and your age.
Some people can only deduct 20% to 30%.
Youll also need to itemize deductions, rather than take the standard deduction.
More From GoBankingRates
Share This Article:
