Determining the Best Benefit
If taxpayers claim the tuition and fees adjustment to income, they cannot claim the education tax credit. The education credits include the American opportunity and lifetime learning credits, which are discussed in more detail in the Education Credits lesson. For most taxpayers, the tax credit is more beneficial than the adjustment. However, it is important to calculate and compare the education benefits to determine which credit is better for the taxpayer.
Complete the entire tax return separately using the tuition and fees deduction, then the education credit. Compare the returns and choose the best credit for the taxpayer.
To compare the benefits see the Highlights of Education Tax Benefits chart in the References section of the Volunteer Resource Guide (Tab 13).