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Estimating our 2016 Tax Return

August 14th, 2016 at 05:16 pm

College starts next week for our daughter. Thus a tuition and housing bill will be due in September. This made me think of the American Opportunity Credit, and wondering how much we might be eligible for.

After a lot of number crunching and estimating, I came up with credits worth between $2075 and $2500. The maximum is $2,500 based on a maximum of $4000 paid in qualified tuition expenses. Room and board are NOT qualified tuition expenses. It is actually our biggest expense.

This means we will get a refund in the spring. I'm estimating approximately $1178, up to $1553 depending on the American Opportunity credit.

I'm going to firm it all up once we have paid tuition in full. I've thought of changing withholding for the last two or two and a half months of the year. I figure it might be nicer to have the money earlier than wait for a refund. That will require some more number crunching later.

4 Responses to “Estimating our 2016 Tax Return”

  1. MonkeyMama Says:

    I need to do the same. Crunch some tax numbers and do some tax planning.

  2. ceejay74 Says:

    Way to be ahead of the curve! I'm wondering if AS will owe less in taxes this year. Maybe she'll have a bumper crop of jobs this last third of the year, but so far she's earning less than last year.

    Our tax guy gave us a set minimum amount to pay in quarterly taxes, but if at the end of the fourth quarter it's clear she earned less, can I make the last payment less? Or should I play it safe so I don't risk a penalty?

  3. rob62521 Says:

    Good idea to plan ahead. You are smart!

  4. creditcardfree Says:

    @ceejay, not sure about quarterly taxes. I think they are an estimate of money owed, right? So people are often off. I'd ask the tax guy, or look around on the IRS website for guidance. I haven't ever had to do those myself.

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