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Taxpayers who are currently paying for higher education expenses may be eligible for certain tax incentives and benefits. Tax deductions
are subtracted from your income before calculating your tax. A tax credit is subtracted directly from the federal income tax you owe.
Student Loan Interest Deduction - You may be able to deduct the interest you paid on qualifying student loans. You do not need to
itemize your deductions to claim the interest paid.
Hope Credit and Lifetime Learning Credit - You may be able to claim a portion of your annual qualified education expenses.
Coverdell Education Savings Account - You may be able to contribute to a Coverdell Education Savings Account to finance qualified education
expenses for a beneficiary.
Scholarship and Fellowship Grants - If you receive a scholarship or fellowship grant, all or part of the amounts you receive may be tax-free.
Work-Related Education Expenses - You may be able to deduct work-related education expenses paid during the year as an itemized deduction
on Form 1040, Schedule A.
For more information regarding education-related tax deductions, you should contact a qualified tax advisor or accountant. You may also refer
to IRS Publication 970, Tax Benefits for Higher Education.
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