Life has only three guarantees: death, taxes and terrible parking on campus. So let’s kick the year off with the least depressing of those – taxes. Specifically the American Opportunity Tax Credit which allows students and families to deduct up to $2,500 of higher education expenses.
Tax credits are dollar-for-dollar reductions in the amount of taxes you must pay, and in some cases can even generate you a refund, meaning the IRS will send you money.
The American Opportunity Tax Credit is a generous and essential tool for families trying to afford the ever increasing costs of college. However, claiming the credit can sometimes be as complex a process as trying to figure out what Coach Orgeron is saying.
So let’s break it down to make sure you take advantage of this tax credit.
First off, the credit is only available for students who are in their first four years of pursuing a higher education. If you are starting your fifth year in college, you will be ineligible for the credit.
You must also be pursuing a higher education. Students must be enrolled at least half-time for one academic period in the beginning of the tax year. Also, the student must not have had any felony drug convictions during the year. If you’re going to start dealing drugs, at least wait until your fifth year.
You should also note that this credit cannot be claimed by a dependent. If your parent or guardian claims you as a dependent on their taxes, then they alone are eligible to take this credit, assuming you meet all of the above criteria. If you are not claimed as a dependent, then you can claim the credit for yourself.
Lastly, for the taxpayer claiming the credit, their adjusted gross income cannot exceed $90,000 for single filers, or $180,000 for married people who file jointly. 
If you are eligible to take The American Opportunity Tax Credit, let’s get into the fun part — what you’re entitled to.
The credit will allow you to reduce your taxable income by up to $2,500 of qualified education expenses. You may take 100 percent of the first $2,000 of expenses and then 25 percent of the next $2,000 in expenses.
For example, if you have $3,000 in eligible expenses, you will receive a $2,250 credit. You will need to incur $4,000 in qualified expenses to receive the full $2,500 credit.
You may be asking yourself what are qualified education expenses. As a rule of thumb, tuition, required fees and course materials like books are covered under the credit. Sometimes, if the school requires it, computer purchases can also be a qualified expense. Other expenses like room and board are not covered by the credit.
If you have education expenses paid by scholarships or tax-advantaged education accounts such as 529’s, you will not be able to simultaneously receive the tax credit for those expenses. You also can’t receive multiple tax credits for the same expense.
Finally, you should know the process for claiming the credit. You simply fill out tax form 8863 which will calculate your credit and then attach it to your income tax return. It’s just that easy.
Maybe all of this doesn’t sound so simple, but if you read this whole column, then you now know more about taxes than 90 percent of students on campus. At the very least, you should now be able to inform you parents or tax preparer of this great tax resource.

Jay Cranford is a 23-year-old finance senior from St. Simons Island, Georgia.