Can we take the lifetime college credits for 2 kids?

[leahjade]

We got $2000 credit for our college daughter and wondered if we would be able to take $2000 additional when we have 2 kids in college?

 

[Cindy B]

I don't know about your own children.. but DH and I are both college students and we were able to take it for two people.

 

[tar heel]

Yes, you can.

Remember, though, if either of them are in the first two years of school, the Hope credit may be worth more.

 

[leahjade]

My friend just said she took it for her and her daughter and got to deduct $4000 by using Turbo Tax but I thought it said $2000 was the limit per family.

 

[imsayin]

You can take 1 of the following, if you qualify and don't earn more than the designated amount (differs for each):

Hope credit: up to $1650 per eligible student
Lifetime learning credit: up to $2000 per return

Tuition & Fees deduction: maximum of $4000

Check IRS Publication 970 for specifics on each.

 

[leahjade]

is the tuition and fees $4000 different than the lifetime learning credit? is there a different form for that? I hope I didn't screw up my tax form - I only took the $2000 credit though we had much more than that in tuition.

 

[jenm2878]

You are better off taking the $2,000 credit rather then the $4,000 deduction. The credit is a dollar for dollar reduction in your tax while the deduction savings is the $4,000 x your tax rate. Unless you're paying more then a 50% tax rate, the credit is a better deal.

Ex: $4,000 x 25% tax rate = $1,000 tax savings versus $2,000 tax savings with credit.

 

[imsayin]

You are better off taking the $2,000 credit rather then the $4,000 deduction. The credit is a dollar for dollar reduction in your tax while the deduction savings is the $4,000 x your tax rate. Unless you're paying more then a 50% tax rate, the credit is a better deal.

Ex: $4,000 x 25% tax rate = $1,000 tax savings versus $2,000 tax savings with credit.

Some people don't qualify for the credit based on their income, but they can take the deduction as it has a higher income limit.