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Deductions & credits
contributions to a 401k will lower your adjusted gross income and reduce your taxes. The tradeoff is that you generally can not withdraw the money until you are over 59.5 without a 10% penalty (there are a few exceptions to that rule, but let's not go there).
your adjusted gross income (line 11) needs to be below $180,000 to be eligible for the college tax credits. And as long as the qualified educational expenses exceed any scholarships by at least $4000, you should be eligble for a $2500 tax credit (Look at form 1098-T - box 1 and box 5)
everyone's tax situation is different so it is hard to provide an opinion.
‎August 26, 2023
3:12 AM
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