| These lesser-known tax tips may help college-bound families | | |  | WED, JUN 07, 2023 | | | | Education funding can be complicated, especially when you're juggling eligibility for college tax credits.
And of course, higher education has quickly become one of the largest expenses that a family will face.
To that point, the annual costs to send a student through an average four-year college is $35,000, including books, supplies and daily living expenses.
There's some good news, however. CNBC personal finance reporter Kate Dore spoke with several tax experts and they weighed in and offered how families can save on taxes by analyzing payment options.
For example, independent students and parents can qualify for the American opportunity tax credit if they paid for qualified education expenses used for undergraduate courses. FYI: The amount you're allowed to claim depends on your modified adjusted gross income.
Meanwhile, some tax experts suggest taking student loans.
While this may seem counterintuitive, the strategy may offer tax-free loan forgiveness for certain future nonprofit and government employees. What's more, student loans may provide other benefits like the ability to claim the American opportunity tax credit or establishing credit for the student.
Many parents are obviously looking for ways to send their kids to college and figuring out how to pay tuition costs. By assessing their tax situation and considering some money-saving tactics, they may be able to reduce the cost of college. It makes sense to consult a tax expert to weigh your options.
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