Tax Law Changes in 2020 That Can Fatten Your Refund

Recent congressional acts have made a number of adjustments to the tax code, and some of these changes may affect your refund. We’ve rounded up 10 important tax law changes in 2020 that can potentially increase the amount you are refunded. It’s best to review the changes that have occurred every tax year so you can be sure not to miss out on any refund advantages when you file.

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1. The American Opportunity Credit changes

The once temporary American Opportunity Credit has now been made permanent. Depending on income and filing status, taxpayers who pay college-related costs for themselves, a spouse, a child, or another dependent can receive a credit for up to $2,500 in tuition and related expenses, such as course materials.

Here’s how it works: You get a credit for 100% of the first $2,000 you spend on post-secondary education. After that, you can claim a credit of 25% of up to the next $2,000. The credit is partially refundable, so if it reduces the taxes you owe below zero, you can receive up to $1,000 in the form of a refund.