For jr/sr college students (esp Adult) -- American Opportunity Credit

branv

<font color=blue>The safety feature in my parents
Joined
May 20, 2005
Messages
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In doing our taxes, just found out about this and wow wow WOW, did it bump up our return!

DH and I both returned to school in our 30's to finish bachelor degrees. Up until now, it's always helped us a little on our tax returns thanks to education deductions, etc, but not a great deal. Especially now since I've graduated and DH's work pays for most of his, we don't see a whole lot of money back for it.

But ooooh my, not this year! This was the first year DH had to pay any real amount of money on his own dime -- about $3500. Turns out, this is also a year that is eligible for the American Opportunity Credit.

Apparently, in years past this was the Hope Credit -- which we didn't qualify for as it was only for the first two years of college and we re-entered college already as Juniors. We always ended up with the Lifetime Learning Credit, which is helpful but considerably less. From what I've read, for the tax years 2009 and 2010 Hope was replaced by the American Opportunity Credit which allows up to a $2500 credit for tuition paid in those years, but extends it to include the first four years (fresh/soph/junior/senior). It also, unlike in years past, allows you to claim your textbook costs!

For us, for years we've almost always gotten between $1500-$1800 back in tax returns (no kids). This year, as I entered in all our information about salaries, normal deductions, it was the usual return amount. When I entered in the education information, it jumped to over $4000 in tax return! You should have seen me running around like a chicken checking my records, the tax code, everything...but it all holds up. :thumbsup2 Our planets just aligned that the one year we had to pay out, this credit was available to us.

And since I didn't know a thing about it until this, and wouldn't have if not for Turbo Tax, I wanted to be sure to pass this along for any of you out there who may also be adult students, especially if you don't use a tax preparation software or accountant.

Now there are stipulations, such as how many times you can claim this kind of credit, salary requirements, etc. But here is the link to the IRS site: http://www.irs.gov/newsroom/article/0,,id=211309,00.html

Can't give any more info than that since I am NOT a tax person, but I can say in advance that you cannot claim any school expenditures for which you were reimbursed (scholarship, grant, employee reimbursement), but you can claim tuition that you used a student loan for (since it is still, ultimately, money you will pay out). I urge you to call the tax hotline for more info if you think it might be of benefit to you. Hope that helps!
 
the exact same thing happened to me last year....Turbo Tax found it for me too...went from avg. return of $1100 up to $5500 (i had 2 kids in school)...sounds like u have good reason for a celebration:goodvibes
 
the exact same thing happened to me last year....Turbo Tax found it for me too...went from avg. return of $1100 up to $5500 (i had 2 kids in school)...sounds like u have good reason for a celebration:goodvibes

Thanks! It took about 10 minutes for me to convince DH it wasn't a mistake :rotfl: Pretty sure he'll still be skeptical until the payment is in our bank account.

One thing I love about Turbo Tax is how the little money counter starts spinning and you feel a little like the bells have just gone off on a slot machine, waiting to see what the pay off is ;)
 
found this credit last year and made sure to click on it for this year too. Most of our college expenses are paid through grants but what isn't and all our books add up to a big chunk of money that we get as a credit.
 














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