For tuition assistance, this 2010 – 2012 college tax credit was very helpful for both parents and college students. And if you think you're eligible, you should claim it.

For you to do this, you should file first your federal tax return forms, either electronically or printed copy. If you try to claim it by filing 1040EZ form, it's sad to say it will not work. The right way to claim it is by filing either 1040 or 1040A form.

Obviously, the credit will not suddenly appear to your check because you or your child went in to college. And the credit for college will not also apply on your behalf.

The Best Uses of Tuition Tax Credit

The full amount of American Opportunity Tax Credit is worth $2,500. Whether you get it or not, it will depend:

•    on your qualified educational expenses
•    on your federal tax liability

Now, let’s say, for income taxes at least $2,500 you are not liable, you can still receive the highest amount of credit worth $1,000, even the amount you spent is more than $2,500 in qualified educational expenses

Where you can use that $2,500 (assuming you receive it)?

Whenever you receive free money, always remember these principles that can help you to:

1.    reduce debt
2.    or, grow income

It means you should save the money to help you improve your financial situation. The amount $2,500 is too many, depending on how you use it.

Here are some ideas how you can use it:

•    You can use the saved money by taking summer courses. Getting the degree faster can help you save money and may quickly qualify you to a higher income job.
•    If use a college loan to enter college (and it is qualifies for the credit, even if this is deferred) start to make payment for accrued interest in order to lower it when you graduate.
•    Use the saved money to buy cheap textbooks for next semester.
•    Start building some equity. Try investing on a business to add more income.

Start planning and use your credit wisely.