Generally, it is best to calculate it both ways to determine which one gives the greater tax benefit. The tuition and fees deduction is a deduction which reduces taxable income, so the higher the tax bracket of the taxpayer, the more attractive this option becomes. The LLC and AOTC are credits, which are a dollar-for-dollar reduction in the tax liability. Additionally, the may be refundable, meaning some of it can be paid back to your if your tax liability is insufficient to cover the full credit. For most taxpayers, the credits are the better way to go.

Generally, it is best to calculate it both ways to determine which one gives the greater tax benefit. The tuition and fees deduction is a deduction which reduces taxable income, so the higher the tax bracket of the taxpayer, the more attractive this option becomes. The LLC and AOTC are credits, which are a dollar-for-dollar reduction in the tax liability. Additionally, the may be refundable, meaning some of it can be paid back to your if your tax liability is insufficient to cover the full credit. For most taxpayers, the credits are the better way to go.