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Take advantage of education tax credits

School-books-teacher-apple_2How's school going?

Classes are probably a lot easier when you don't have to worry so much about paying for them.

Your good old Uncle Sam can help out a bit. The tax code offers a couple of tax credits to cover some education costs.

Remember, tax credits are better than deductions because they give you a dollar for dollar offset against your tax bill. The best credits also can get you a refund from the Internal Revenue Service when you don't owe any taxes.

That's why the discussion of the American Opportunity and Lifetime Learning tax credits are today's Weekly Tax Tip.

The American Opportunity tax break, created as part of the 2009 stimulus bill and subsequently extended through 2012, can get you $2,500 per student for costs incurred during the first four years of college. Even better, $1,000 of the credit is refundable.

As its name implies, the Lifetime Learning credit can be claimed in connection with a wider range of school expenses. This tax break of up to $2,000 per tax return can be used in connection with undergraduate, graduate and professional degree courses.

These are just two of the tax-favored ways to pay for the ever-growing cost of college. Whether you're a student or the proud parent of one, be sure to do your homework so you can get the most possible help toward that degree and beyond.

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