Ed credit

[schirallicpa]

Clients daughter started college in Fall 05. Took Hope on 05 and 06, then Lifetime for 07 and 08. Finished college in Spring 09, which is still the 4th year of college. Can we take the Amercian Opportunity?

What do you think?

[Gail in Virginia]

I don't see why not.

[Terry D EA]

Why not compare the three you have left, Tuition and Fees, Life Time Learning and the AOC and see which one returns the best result. Just a thought

[Catherine]

Why not compare the three you have left, Tuition and Fees, Life Time Learning and the AOC and see which one returns the best result. Just a thought

I always try all of them before settling on one. Make sure the ed credits form is loaded -- it does not auto-load this year.

Sometimes I've skipped the Hope entirely because another method works better.

This year the AOC is working nicely for a lot of folks -- it has a refundable credit portion.

[grandmabee]

I always try all of them before settling on one. Make sure the ed credits form is loaded -- it does not auto-load this year.

Sometimes I've skipped the Hope entirely because another method works better.

This year the AOC is working nicely for a lot of folks -- it has a refundable credit portion.

isn't the hope credit now only for the midwestern disaster area?

[SaraEA]

The American Opportunity Credit is "Available ONLY for 4 tax years per eligible student (including any year(s) Hope credit was claimed)" IRS Pub 970. Nice try, but no cigar.

[grandmabee]

The American Opportunity Credit is "Available ONLY for 4 tax years per eligible student (including any year(s) Hope credit was claimed)" IRS Pub 970. Nice try, but no cigar.

why? she claimed hope two years and lifetime 2 years and as of January 2009 she was still a 4th year student.

[SaraEA]

You might be on to something. Remember how the old Hope credit worked? You could take it only two times. We had to think ahead for clients who had a student enter school in the fall so only half the tuition was paid that first year. The student would technically be in their first 2 years of school for 3 years [as a freshman fall semester 1st year, spring (freshman)and fall (sophomore)the second year, and sophomore spring and junior fall of the third year]. Sometimes it was best to claim the Lifetime credit the first year to save the Hope credit for the next two years when the tuition paid would be double. As long as they were a sophomore at least one semester during that 3rd year, the IRS allowed the Hope.

Your client is in her fourth academic year of study and has only taken the Hope twice, so go for it.

Where this starts to get sticky is with students who take 5 and 6 years to graduate (somewhat the norm these days). Sure they're still a Senior, but in the 5-year plan. I know a guy with four kids who let them know he'd pay for 4 years of college period. Not surprisingly, all four graduated in that time.