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T
tgrush97
January 26, 2021
Question

Why does it say that the American Opportunity Credit (about $1900) save me more than the tuition deduction of $4000?

  • January 26, 2021
  • 1 reply
  • 0 views
I made less than $25,000

1 reply

M
MinhT1
January 26, 2021

The American Opportunity credit is a credit which directly reduces your tax liability dollar for dollar, in your case by $1,900.

 

The tuition and fee deduction is a deduction. It reduces your taxable income. In your case, your tax bracket is 12% and the $4,000 deduction will only reduce your tax liability by $4,000 x 12% = $480.

 

This is why the American Opportunity credit will save you more tax than the tuition and fee deduction.

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