posted
Okay, I know I don't qualify for a Hope credit, because that is only for students in their freshman or sophomore years of college.
However, I can't tell if I am supposed to claim the tuition paid last year as a tuition deduction or the lifetime learning credit. Any ideas?
*misses Boon for entirely selfish reasons*
I have some tax software because it's usually not a big deal, but the software is asking me to designate which of those two I want to apply the tuition money. There must be a difference, because it makes a difference of almost $1000 in terms of what I get back. I don't want to cheat, though, so I want to be sure I'm picking the right thing. But I can't tell which one!
Posts: 26077 | Registered: Mar 2000
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posted
My understanding is that you cannot take both, but if you're eligible you can use either one. So I would advise using which one gets you the bigger return. So long as you don't try to double-dip and take both of them, I think you would be fine.
From publication 970:
quote:You may be able to take a tuition and fees deduction for your education expenses instead of a lifetime learning credit. You can choose the one that will give you the lower tax. See chapter 6 for details about the deduction.
posted
I'm trying to figure out what the difference is between these two things.
The deduction would be taken out of your taxable income before your tax is calculated. The credit will apply toward tax you owe. I assume it wouldn't apply to both, but stranger things can and do happen.
P.S. Belle seems to have things well in hand.
I haven't ever worked with the tuition incentives before. Good to catch up on it. I'm surprised your tax software didn't just opt for the bigger savings.
As you may have figured out by now, there are scenarios, depending on one's tax bracket and factors impacting modified AGI, where the other one might be more advantageous.
Posts: 11017 | Registered: Apr 2003
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posted
Does anyone know if the alternative minimum tax applies to middle-income taxpayers? My mother-in-law does our taxes, and it applies to us (grrrr...how totally ridiculous), except she thinks that maybe Congress extended the exemption for middle-incomes.
I'm sorry if my question doesn't make any sense. I'm asking based on what she told me, and my memory is probably very faulty and confused.
Posts: 834 | Registered: Jun 2005
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posted
Thanks, pooka. It looks like we won't be affected. I hope not, as the original intent was certainly not to target families like ours.
Posts: 834 | Registered: Jun 2005
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