Advanced learning opportunities may broaden your horizons, but it takes money to fund your education goals. As a student, you may qualify for assistance with your tuition and other education related expenses through a tax credit, or a tax deduction. The total amount you can receive is $4,000, but the total amount varies based on your income level.http://www.youtube.com/watch?v=GBFPE5YdVfA 

In addition to immediate tax credits and deductions that you may be able to realize as a student, you may also qualify for tax relief after you complete your education. The interest you pay on student loans may be deductible in future years and any amount you save in special education funds may be withdrawn tax-free based on specified restrictions.http://www.irs.gov/publications/p970/ch01.html#en_US_2010_publink1000178020  

The American Opportunity Credit offers a deduction of $2,500 per eligible student for up to 4 years of postsecondary education. As a tax credit, the total directly reduces the amount of tax you may owe. Use Form 1098-T to help determine your qualified education expenses. If you are due more credit than your tax obligation, you can receive up to 40 percent of the credit as a refund.http://www.irs.gov/publications/p970/ch02.html 

Students must be enrolled in a program that leads to an undergraduate or equivalent degree and be enrolled at least half time for one academic period during the year to qualify. The student can be yourself, dependents or your spouse. Tuition and related expenses required for attendance are eligible under this credit. Any fees covered by scholarships, Pell grants, Veterans' education assistance or employer-provided assistance are not eligible for credit redemption.http://www.irs.gov/publications/p970/ch02.html 

The Lifetime Learning Credit is similar to the American Opportunity Credit, except that the credit is up to $2,000 per return (as opposed to per student), income-ceilings are lower, and the credit is nonrefundable. The credit is valid for all years of postsecondary education for an unlimited number of years and can be applied for one or more classes. Tuition, supplies, equipment, and required fees can be applied towards the credit.http://www.irs.gov/publications/p970/ch03.html 

Since you cannot take both the Lifetime Learning Credit and the American Opportunity Credit, you should fill out your tax forms using both tax incentives to see which one offers the best tax treatment.http://www.youtube.com/watch?v=GBFPE5YdVfA  If you use a software program to help prepare your taxes, the program will automatically determine the best deduction for your financial situation.http://www.youtube.com/watch?v=GBFPE5YdVfA