If you're currently in school, just starting your career, or learning a trade, there’s good news: the tax code may be able to lighten your financial load—if you know how to use it.
The 2025 updates include some important opportunities (and a few potential risks) for students, recent grads, and young entrepreneurs. Here’s what to look out for and how to make the most of it.
1. Education Credits Apply to More Than Just College
The American Opportunity Credit and Lifetime Learning Credit are often associated with traditional 4-year colleges—but that’s no longer the full picture.
These credits may now apply to:
- Trade schools
- Technical programs
- Certificate courses
- Continuing education
If you're learning new skills to improve your earning power, you may be eligible for a valuable tax credit to offset those education expenses.
2. Tools and Gear May Be Deductible
If you’ve started working in a skilled trade—think welding, auto repair, cosmetology, etc.—and you're buying tools or equipment out-of-pocket, don’t overlook this opportunity.
If you're earning self-employment income, you may be able to deduct the cost of tools and gear as a business expense.
In some cases, deducting expenses can provide a greater tax benefit than claiming an education credit. We often use a combination of strategies to make sure you’re getting the maximum possible savings.
3. Student Loan Refund Offsets Are Back
After years of paused collections, the government has resumed efforts to collect on defaulted federal student loans—and that includes seizing tax refunds from borrowers who are behind on payments.
If you’re not in good standing, your tax refund may be at risk.
To avoid surprises, check in with your student loan servicer and ensure you’re on a payment plan or in deferment. Taking care of it now can save you from a painful refund offset later.
Building Your Future with Smarter Tax Strategies
Whether you're studying, training, or launching your first business, the tax code can work for you—but only if you plan ahead.
You’re the one doing the hard work to build your future. My job is to make sure taxes don’t get in the way—and ideally, that they help support your growth.
Email me at kim@kimberlybagleycpa.com or book a call with me here if you want guidance on student-related tax strategies or if you’re helping a student in your family get started on the right foot.