Can tuition deductions affect your AGI?

rockvillemom
Tue, 01 Jan 2013 21:51:59 +0000

I am not a tax expert, and as happy mom said, you really should read the IRS publication, but I have to call your attention to the difference between a tax deduction and a tax credit.

A tax deduction reduces your income, so you pay taxes on a lower amount of income. It reduces your AGI.

A tax credit reduces the amount of taxes you owe. For most people, a $2500 tax credit is more valuable than a $4000 deduction. And with the AOC, a portion of the $2500 is refundable, meaning that if you owed no taxes, you would still get a refund.