In This Chapter

There’s a famous proverb that states “the enemy of my enemy, is my friend.” In other words, even though I might otherwise dislike you, the fact that we have an enemy in common makes us temporary allies. Nowhere is this more true than with the IRS, who is happy to lower your tax burden if you’re in the midst of trying to fund a college education.

That’s because the IRS, as instructed by Congress, is willing to hand you back some rather large piles of money simply for paying college tuition. These sums are so substantial, in fact, that they can virtually wipe out any unfunded college expenses for students attending lower-priced colleges. Unfortunately, they can only be utilized when you file your income tax return, so you might have to wait up to a year and a half from when you initially pay your expenses to receive a benefit.

Of course, all the tax opportunities presented in this chapter take some knowledge of tax laws and proper income tax preparation to take full advantage of, so if you are not comfortable using a program like TurboTax, you might want to seek professional tax help. Naturally, if you’re already paying someone to prepare your taxes, you’ll need to point out the fact that you’re paying college expenses when you go to your annual appointment.