Did you know that the Internal Revenue Service (IRS) provides tax benefits for education? 
The tax benefits can be used to get back some of the money you spend on tuition or loan interest or to maximize your college savings. Read IRS Publication 970, Tax Benefits for Education to see which federal income tax benefits might apply to your situation. Here are some highlights : 

Tax Credits for Higher Education Expenses 
Two tax credits help offset the costs tuition, fees, books, supplies, equipment of college or career school by reducing the amount of your income tax : The American Opportunity Credit allows you to claim up to $2,500 per student per year for the first four years of school as the student works toward a degree or similar credential. The Lifetime Learning Credit allows you to claim up to $2,000 per student per year for any college or career school tuition and fees, as well as for books, supplies, and equipment that were required for the course and had to be purchased from the school. Even if you normally wouldn t file a tax return because of your income level , be sure to do so! If you don t , you ll miss out on tax credits that would put money in your pocket. 

Coverdell Education Savings Account 
A Coverdell Education Savings Account allows up to $2,000 a year to be put aside for a student s education expenses elementary, secondary, or college or career school. 

Qualified Tuition Programs (QTPs; also known as 529 Plans) 
A QTP/529 plan is established by a state or school so that you can either prepay or save up to pay education - related expenses. Once you re in college or career school and you withdraw money from your account to pay your education expenses , the money you withdraw will not be taxed. Learn more about state 529 plans. To find out whether the college you plan to attend participates in a QTP , ask the financial aid or admissions staff. 

Student Loan Interest Deduction 
You can take a tax deduction for the interest paid on student loans

user: how can tax benefits help me?

assistant: They help you by getting you back some of the money you spend on tuition or loan interest or they can maximize your college savings.

user: what is the most I can claim as a credit?

assistant: The American Opportunity Credit allows you to claim up to $2,500 per student per year for the first four years of school.

user: how many of these types of credits are there?

assistant: There are two tax credits that help offset the costs of college by reducing the amount of your income tax.

assistant: Do you normally file a tax return?

user: yes, but not every year

assistant: Even if you normally wouldn’t file a tax return because of your income level, you should still do it, so you don't miss out on tax credits.

user: what is the other tax credit besides the one you already told me about?

assistant: There is also the Lifetime Learning Credit which allows you to claim up to $2,000 per student per year.

user: are there any of those prepay programs that gives us tax benefits?

assistant: We have the QTP/529 plan, it is established by a state or school so that you can either prepay or save up to pay education-related expenses. Once you are in college and you withdraw money from your account to pay your education expenses, the money you withdraw will not be taxed.