Buzz
Heading back to school this fall? Although some textbooks are going digital, you'll likely still need to purchase or rent a few for your college courses. And there's always that professor who insists on the latest edition of the textbook, even if it costs an extra $80 compared to last year's version. But you might be able to get some of those expenses back.
After you've spent your money at the campus bookstore, be sure to keep your receipts safe until tax season. You might need them when you're preparing your tax return.
Since the IRS considers books, supplies, and equipment essential for your education, you can deduct them when filing your taxes annually.
The deduction is part of the American Opportunity Tax Credit, which lets undergraduate students deduct education-related costs from their taxes, such as tuition, room and board, transportation, and all the additional fees that stack up each semester. This tax credit can provide up to $2,500 per year.
Graduate students can claim deductions on textbook costs through the Lifetime Learning Credit, which covers up to $2,000 in education expenses annually. (Graduate students can also separately deduct tuition and fees, unlike the AOTC, which combines all education expenses under a single credit.)
It may not be immediate cash in hand, but any reduction in your tax bill can go a long way in helping you manage your finances while you're in school.
The IRS offers an online tool to guide you through the education-related credits or deductions you may qualify for. If you're heading to school or returning after a break, it might be helpful to complete the eligibility survey so you know what to expect come tax season.
