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.
