While some college expenses are tax-deductible, many taxpayers assume that once they graduate, such deductions are no longer allowable. The reality is that the IRS grants a lifelong learning credit amounting to 20% of your educational expenses every year, with a maximum credit of $2,000 annually. The credit does phase out based on MAGI, however, from $59,000 to $69,000 for singles and $118,000 to $138,000 for joint filers.