You can save money by reducing your income tax bill for the years that you attend University of Maryland University College. Two tax programs are available to college students. For tax credits, the amount an individual or family can claim depends on income, the amount of tuition and fees paid, and the amount received from certain scholarships and grants. For more information about these tax benefits, contact a tax professional.

The American Opportunity Tax Credit

The American Opportunity Tax Credit allows families to claim a credit of up to $2,500 for each eligible dependent for up to four tax years. The credit applies toward tuition and fees for the first two years of postsecondary education for students who are enrolled at least half-time in an eligible degree or certificate program.

The Lifetime Learning Credit

The Lifetime Learning Credit allows families to claim up to $2,000 per year for postsecondary education, including undergraduate or graduate degrees or individual courses to acquire or improve job skills.

Itemized Deductions

Additionally, you may be able to deduct up to $4,000 in tuition and fees from your income if you itemize deductions on your return. The Internal Revenue Service has more information about education-related tax benefits, including deductions for work-related education.

Tax Credits vs. Tax Deductions

Tax credits provide a reduction of your income tax liability. A $2,500 tax credit saves you $2,500 in taxes. Tax deductions lower your taxable income, so your savings vary based on your tax rate.