Even if you don't itemize your tax deductions, you could save money with these education tax benefits.

  • American Opportunity Credit — claim this credit for qualified expenses, including course materials, paid during the first 4 years of higher education, up to $2,500 per student per year. Forty percent (up to $1,000) is refundable. The American Opportunity Credit replaces the Hope Credit for 2010, making the credit available to a broader range of taxpayers.
  • Lifetime Learning Credit — A credit of 20% of your annual tuition and related fees, with a credit maximum of $2,000 per return. The tax credit may be claimed for an unlimited number of years, and can be used for higher education expenses that don’t qualify for the Hope or American Opportunity credits, for example, you don't have to be a full or half-time student.
  • Tuition and Fees Deduction — You can deduct up to $4,000 of qualified education expenses per student for education costs.
  • Student Loan Interest Deduction — Deduct up to $2,500 of interest paid on a qualified student loan.
  • Exclusion for Savings Bond Interest — Some or all of the interest received from eligible bonds issued after 1989 may be excludable if qualified higher education expenses for the year are at least as much as the proceeds of the redeemed bonds. You cannot take the exclusion if your modified AGI is over $135,100 (for married filing jointly or qualifying widower) or $85,100 (single or married filing separately).
  • 529 Plans and Computer Expenses:  A 529 plan is a savings plan with tax benefits, where funds can be withdrawn tax-free to pay for college or qualified post-secondary education expenses. As of 2009, the qualifying expenses were expanded from tuition and books to include computer technology and equipment or internet access and related services. This means that a computer ande printer, as well as educational software, could be tax free when bought with 529 plan funds for a higher education student .

Note: You can't use the same expenses to claim more than 1 of the above benefits, and other restrictions apply.