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Stephanie B.
Stephanie B., Enrolled Agent
Category: Tax
Satisfied Customers: 556
Experience:  MTax, EA, QuickBooks Proadvisor. Over 15 years accounting and tax experience specializing in individual and small business.
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My daughter received a 1098-T for tuition. She has no income

Resolved Question:

My daughter received a 1098-T for tuition. She has no income currently and was not planning on filing a tax return. Will this tuition expense be deductible next year or beyond, when she is employed? If so, does she need to file this year for any reason?
Submitted: 5 years ago.
Category: Tax
Expert:  Stephanie B. replied 5 years ago.

Stephanie B. :

Thank you for using Just Answer.

Stephanie B. :

Can your daughter be a dependent of someone else?

Customer:

No. She is 26.

Stephanie B. :

Ok. You know she can be a dependent even if she is 26 is she has no income, lives with someone else either over half the year if a relative or all year if not related, and they provide over half of her support.

Stephanie B. :

Back to your question though, is the 1098-T marked as at least a half time student and is she in her first four years of college?

Customer:

That is not the case.

Customer:

Yes it's marked at least 1/2 time, and she is in the 4th (last) semester of a 2-year vet tech program. 2 years junior college previously.

Stephanie B. :

Ok. Then she would qualify for the American Opportunity Credit. This is a little strange, but with this credit 40% of her qualified education expenses are refundable. She does not have to have any income for this...though you will have to put a $1 interest income or such on the return in order to efile it because the IRS won't allow a zero income tax return to efile. This is something she should look into. Here is a link to the irs website regarding this credit. http://www.irs.gov/newsroom/article/0,,id=205674,00.html

Stephanie B. :

If she maxes out, she could get $1000 back on this refundable credit.

Stephanie B. :

Review all the additional expenses that can be taken for the American Opportunity Credit. It is much broader than the Lifetime and Hope credits were on what is a qualified education expense.

Customer:

Very interesting! How does this relate to her student loans? Can she use the refund to pay them down? and, is she required to?

Stephanie B. :

She can use the refund for anything she wants to. She can pay down her student loans but she isn't required to. There is nothing that says what she has to use this refund for.

Customer:

Also, theoretically I can claim her as a dependent. Can I get the same credit, to avoid an additional filing?

Stephanie B. :

If you could claim her as a dependent, you would get to take advantage of the education credit. It goes with dependency exemption.

Customer:

Okay. I'll look into both. Thanks so much.

Stephanie B. :

You are very welcome. Good luck!

Stephanie B. :

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Please let me know if I can be of further assistance with this question.

Stephanie

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