Pursuing a master’s degree – or higher education in general – is among the best investments you can make today. The market is growing at a sustainable rate, so you will be greeted by plenty of job opportunities by the time you finish. However, higher education is often expensive and beyond reach.
There are several ways you can make pursuing a higher degree more affordable. You can pursue an online MST degree (or other online degrees) to enjoy instant savings when compared to taking an offline program. You can also utilize these tax breaks we are about to review to lower the costs of getting a higher degree further.
The Student Loan Tax Break
If you use a student loan to finance your pursuit, then you can take advantage of the student loan interest deduction to save more money. The tax deduction is designed to aid students who are struggling to repay their student loans. The amount you can claim is not that high compared to other tax breaks, but it is still worth claiming.
The student loan interest deduction allows you to qualify for up to $2,500 in tax deductions. To qualify for the tax break, you only need to use a suitable student loan. You can also utilize this tax break for as long as you are still repaying the student loan. After all, the program is designed to help you repay that loan faster and without spending too much on interest and other charges.
The American Opportunity Tax Credit
The second tax break you should look into is the American Opportunity Tax Credit. As the name suggests, the program is designed to make higher education more accessible. Fortunately, the tax break is yours to claim even when you choose to pursue a higher degree online. If you do decide to get an online master in taxation degree from reputable names such as Northeastern University, chances are you can claim the AOTC tax break.
If you qualify for the strict requirements of this program, you can claim a total tax break worth $2,500 for the $4,000 you pay for tuition and other qualified expenses. It is a substantial amount of tax deduction to pursue, so take your time, understand the necessary requirements, and include the AOTC the next time you file your tax return.
Lifetime Learning Credit
The Lifetime Learning Credit is more relaxed than the American Opportunity Tax Credit. This particular tax break is put in place to encourage more people to pursue a higher degree, even after completing their undergraduate programs. The Lifetime Learning Credit is also there for those who don’t qualify for the American Opportunity Tax Credit.
It is also a more straightforward tax break. You can claim 20% of up to $10,000 in tuition and other expenses in tax breaks. The maximum amount you can claim is $2,000 and you can file the Lifetime Learning Credit every year until you finish the program of your choice. Combined with the other tax breaks we covered in this article, you can save up to $7,000 in taxes and make your next degree that much more affordable.
