It is the name of a deduction. It covers higher education expenses and allows you to possibly deduct a percentage of your education costs from your income before your tax liability is factored.
You would normally receive a 1098-T from the school you attended which reports the tuition and fees which were paid to the school.
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There are basically three different tax breaks for college education:
- American Opportunity (tax) Credit (AOTC) - a generous and partially refundable tax credit. This reduces your tax due and may actually increase your refund.
- Lifetime Learning Credit (LLC) - a non refundable tax credit that reduces your tax due
- The Tuition and Fees Deduction (TFD) - This is an adjustment to (deduction from) income before tax is calculated.
TurboTax (TT) will automatically pick which one is best for you. There is a way to change it, in TT.