I've been crunching numbers.
I plan to claim the American Opportunity Tax credit on our taxes this year. We can claim qualified expenses. Those include tuition, fees, and required course materials, such as books, supplies and equipment. I think I'm also going to claim the money my daughter paid piano accompanists. It was required for the grade to perform with one.
The maximum we can claim is $4000, which as it turns out is just about what we paid. My number crunching came up with $4,102!
Now we did pay more out of pocket for unqualified expenses such as room and board. We just can't claim those. But I have used my daughter's Educational Savings account for most of that expense in 2016. By being able to claim the full $4000 in qualified expenses, we actually get a $2,500 benefit on our taxes.
My current estimate is that we will receive a tax refund of $1500 this season. I don't need too many tax forms to file this year, so I hope to file at the very beginning of February, so that I might have that money to pay tuition on February 12. I can cover it if the refund doesn't arrive prior to that.
I remembered that next year when I file for 2017 we can no longer claim a child tax credit for our youngest daughter. She turns 17 in 2017. The child tax credit is only for those children ages 16 or younger at the end of the tax year.
Qualified College Expenses
January 5th, 2017 at 12:35 pm
January 5th, 2017 at 02:29 pm 1483626593
Did you have to buy your older daughter a new computer to go to college?
January 5th, 2017 at 07:14 pm 1483643672
We didn't 'have' to buy her a computer, but she definitely uses it! She now has a part time job doing design work for the public relations person for the music college. Without access to the computer and Photoshop she wouldn't have been able to take the job. I think at some point probably this semester she would have needed to have the computer she has now.
I would guess most colleges will provide discounts on computers. Definitely check out the requirements for your students intended major. Our younger daughter will likely be engineering. We will like need to get her something other than a Mac as those programs don't usually work with them. But we will probably make the decision for her after she graduates high school.
January 6th, 2017 at 01:00 am 1483664404