Did you know that heading back to college can help you obtain tax breaks and credits? Whether you are pursuing a four-year degree at an online college or you are taking a couple classes at an online school, the United States government will actually reward you with a couple different tax benefits. Here’s a look at the available tax benefits that were available when you filed your 2008 taxes and will likely still be available for you next year as well.

The Hope Credit

As of 2008, the Hope credit can provide you with a credit of up to $1,800 or $3,600 if you are a student in a Midwestern disaster area. The full amount of the credit is dependent upon the amount you pay toward educational expenses. 100% of the first $1,200 you pay toward educational expenses is eligible for the credit, while 50% of the next $1,200 you pay can be credited. If you are a student in a Midwestern disaster area, 100% of the first $2,400 you pay is eligible for the credit and 50% of the next $2,400 is eligible.

It should be noted that there are some income restrictions associated with the Hope and Lifetime Learning credits. As of 2008, those with a modified income of $58,000 or a modified joint income of $116,000 are not eligible to receive the credit. In addition, the amount of the credit is gradually reduced for those with an income of between $48,000 to $58,000 and those with a joint income of $96,000 to $116,000.

You should also be aware that you only receive the Hope credit if you file a tax return and owe money on your taxes, as the Hope credit is subtracted from the total amount of taxes you owe. So, if you owe less in taxes than what you are eligible to receive from the Hope tax credit, you will only receive enough credit to negate what you owe. You also must be enrolled in school on at least a half time basis to be eligible for this particular credit. In addition, the tax can only be taken for the first two years of eligible post-secondary education.

The Lifetime Learning Credit

The Lifetime Learning tax credit follows the same financial guidelines as the Hope credit. As with the Hope tax credit, you can only receive the credit if you owe taxes and the credit you receive is used to offset the taxes you owe. With this credit, however, you can receive up to $2,000 per year for an unlimited number of years. Your credit is determined by calculating 20% of the first $10,000 of educational expenses you pay each year. To be eligible for the credit, you have to be enrolled in a program leading to an undergraduate or graduate degree from an eligible school. Or, you may be enrolled in a course that will help you acquire skills for your job. Be aware that you cannot take both the Hope tax credit and the Lifetime Learning credit during the same tax year.

The Tuition and Fees Tax Deduction

President Barack Obama has been quite vocal regarding his support for education, having challenged every American to head back to school and further his or her level of education. The government’s support of higher education was made clear when Congress decided to extend the Tuition and Fees Tax Deduction benefit until December 31, 2009.

The Tuition and Fees Tax Deduction Benefit provides assistance to those who do not qualify for the Hope or the Lifetime Learning Education credit. With this deduction, you can reduce your taxable income by as much as $4,000. The deduction can be used to offset the costs associated with tuition and other school fees, but not for living expenses, room and board, transportation costs or medical costs.

As with the Hope and Lifetime Learning Education credits, there are income requirements associated with the Tuition and Fee Tax Deduction benefit. If your income is $65,000 or less – or $130,000 or less if filing jointly – you can take the full $4,000 deduction. If you make more than these income guidelines, but you make less than $80,000 or less than $160,000 if filing jointly, you are eligible for a $2,000 deduction.

It is important to keep in mind that tax laws can change. But, for now, there are plenty of tax benefits that will be in place for the remainder of this calendar year and – if President Obama gets things done his way – probably for many more years to come.