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So my daughter is filing as independent , she made only 8000 in tax year 2023. She does not owe anything to fed government and actually due money back on her federal taxes. She got a 1098-T from her graduate school but she did not seem to qualify for the Lifetime Learning credit. Do you know why? Last year she made 30K on W2 and qualified for LLC, got $2000 credit.
I don't know why that is without knowing many other details, but maybe she recieved grants and scholarships that were more than her total out of pocket qualifying tuition? Try her info with the education credit tax interview: www.irs.gov/help/ita/am-i-eligible-to-claim-an-education-credit
So is this only for colleges or universities?? What about technical schools or online program from ??I guess I need to see if they can give me that statement or form ??
Hi! Thank you for posting this. I have 2 questions: - Do you claim this tax credit the year AFTER you start school? I.E. I start school in the fall, but I wouldn't claim this until 2022, correct? -I am going to graduate school in the fall and have been searching and searching for ways to get my tuition covered, reduced, etc. with not a lot of luck - do you have any resources or tips for this? Thanks so much!
-Yes so typically it's going to be based on the qualified education expenses you had in the previous year. So if you file your taxes in April 2021, you will be claiming qualified education expenses you had in 2020 (you should get a 1098-T). Sometimes they make adjustments for school year instead of calendar year. -I would say keep your options open as possible (some schools offer a ton more financial aid than others), research working at the school for reduced (or free tuition), Go for scholarships and grants that are from the Institution, some other employers have tuition assistance (including sometimes for spouses), I hope these tips help point you in the right direction! Good luck!
My question is that I'm being audited for claiming the aotc because I was not aware that the credit can only be claimed for 4 yrs, now I'd like to switch it to the LLC but I only have a 1098t for the previous yr, not for the year that I filed the return. What documents do you think I should send them to satisfy that, or do you think I should just write a letter stating I made a mistake by claiming the credit??
Maybe you can do an amended return to get this fixed. I would suggest working with a tax professional in your area for this! The IRS will get their money!
So if my friend just got a 2k refund and I mean direct deposit refund from this credit, then she must have had a tax bill over 2k between 2020 and 2021?
The LLC is not refundable, the AOTC is partially refundable. Your friend may have overpaid in tax withholdings and/or received other tax credits. No way to really tell without seeing her return, haha.
Possibly. You can check the IRS to see if the seller of the course is a qualifying entity OR if the course is related to improving your skills in your current line of work it could be a deduction.
Thanks for the video! If you are attending an online only accredited graduate level institution, will a computer/laptop fall under a qualified educational expense for the LLC? So that you would be able to claim the cost of the laptop in addition to the cost of tuition?
Hi Daniel, I'm certainly not credentialed to give tax advice, but here is my opinion on it; I do not think a computer/laptop would be a qualified educational expense for the LLC. In IRS Publication 970, it says "Student activity fees and expenses for course-related books, supplies, and equipment are included in qualified education expenses *only if the fees and expenses must be paid to the institution for enrollment or attendance* ." The publication also gives an example that is pretty applicable to your question. "Donna and Charles, both first-year students at College W, are required to have certain books and other reading materials to use in their mandatory first-year classes. The college has no policy about how students should obtain these materials, but any student who purchases them from College W's bookstore will receive a bill directly from the college. Charles bought his books from a friend, so what he paid for them isn't a qualified education expense. Donna bought hers at College W's bookstore. *Although Donna paid College W directly for her first-year books and materials, her payment isn't a qualified expense because the books and materials aren't required to be purchased from College W for enrollment or attendance at the institution.* " Here is the publication for your reference: www.irs.gov/pub/irs-pdf/p970.pdf I hope this helps you out, I wish it was better news. The AOTC is a lot more lenient on education expenses.
