J.K. Lasser's 1001 Deductions and Tax Breaks 2022, 2nd Edition

CHAPTER 3Education Costs

1. FAFSA Submissions
2. Employer‐Paid Education Assistance
3. Scholarships, Fellowships, and Grants
4. American Opportunity Credit
5. Lifetime Learning Credit
6. Work‐Related Education
7. Student Loan Interest
8. Interest on U.S. Savings Bonds
9. Coverdell Education Savings Accounts
10. Qualified Tuition Programs (529 Plans)
11. ABLE Accounts
12. Seminars
13. Educational Travel
14. Cancellation of a Student Loan
15. Penalty‐Free Withdrawals from IRAs
16. Government Reimbursements
17. Internships and Apprenticeships
18. COVID‐19‐Related Grants

No one doubts the importance of education—for ourselves, our children, and our grandchildren—but obtaining it can be pricey. According to the Scholarship Workshop, the average cost of one year in a public university (in‐state) for 2021–2022 is $46,770 and for a private college is $100,946, and the cost of higher education is increasing at 7% annually (compared with an overall inflation rate of about 2.25% for 2021). Fortunately, the tax law provides many incentives to help you save for education and to pay for it on a tax‐advantaged basis. There has also been COVID‐19‐related relief with respect to student loan repayments and other measures related to education costs.

This chapter explains the tax deductions, credits, and other breaks you can claim with respect to education costs. For more information, see IRS Publication 970, Tax Benefits for Education.

FAFSA Submissions

If you want to apply for federal financial aid for yourself or your child, you must complete the Free ...