Now that it’s tax season you may be looking for ways to increase your tax refund. If you’re one of the over 40 million students in America with loans, then you’ll definitely want to read below. There are a few ways you can increase the size of your tax refund, so let’s take a look at how you can do this.

Deducting Student Loan Interest

Any time you make monthly payments on your student loans, the total payment includes both the principal amount and interest. The student loan interest deduction allows you to decrease the amount of taxable income up to $2,500 per year. Anyone who has paid student loan interest in 2021 is eligible to receive this deduction so long as your annual income is less than $70,000 per year after taxes or deductions.

American Opportunity Tax Credit

The American Opportunity Tax Credit (AOTC) is another great way to cut spending and increase your finances. Anyone pursuing higher education at a college for the first time is able to claim 100% of their education expenses up to $2,000. After that, qualifying students can claim 25% of the next $2,000 spent. Parents can take advantage of this tax credit for their kids as long as they’re filed as dependent.

In order to get the full credit of this tax, the adjusted gross income of an individual must be $80,000 per year or less, or $160,000 for married couples filing jointly. The AOTC is a refundable credit, meaning you might be able to get a refund on your taxes if the credit lowers your income tax to less than zero.

Lifetime Learning Credit

The Lifetime Learning Credit (LLC) lets you get money back for education expenses. LLC can help you pay for undergraduate, graduate, and professional degrees. Two areas which you cannot use to get money back, however, are transportation and living expenses.

Through the LLC, you could get up to $2,000 back from education expenses every year or 20% on the first $10,000. Keep in mind that the LLC is not refundable, meaning you can use the credit to lower your tax bill, but you won’t get any of the credit in the form of a refund.

Cutting Expenses

As you can see, there are a few ways students can take advantage of tax credits. The above examples are just a few ways students can get money back on their expenses. Student Loan Interest Deduction is something everyone pursuing higher education should look into.

Best of luck paying your loans off and getting to that next step in your financial future.