Admin

Posted by

Anne Powelson Anne Powelson
This e-mail address is being protected from spambots. You need JavaScript enabled to view it
edge contributor

Share

Your last tuition payment

Rate this item
(1 Vote)

Everyone has innocuous things which make them cringe. In my case, it's people announcing they've just sent in their last tuition payment.

I know they're proud, and I understand their relief, but I'm tempted to ask if that was a good tax decision. Specifically; is there an advantage to pay at the end of 2015, or is it better to wait until the start of 2016? How do you make this decision?

Have you already maxed out your credits or deductions?

College tuition payments are huge, especially for private colleges. College credits have ceilings on the tuition payments used in their calculation. Have you already maxed your credit out paying for the fall semester? The American Opportunity Credit (AOC) maxes out at $4,000 in tuition and related education expenses. Since the AOC can only be claimed four times, if you've been attending college for more than four years, you may be using the Lifetime Limit Credit. That credit maxes out at $10,000 of tuition payment no credit is allowed on book or supply expenses.

Remember, you must adjust for any scholarships you choose to make nontaxable, as well as any tuition paid from certain other nontaxable sources, such as employer tuition reimbursement or veteran's benefits.

Does your income allow you to take full advantage of the credits?

College credits may be limited by your income. Is your income above where you can take the credit? If you are claiming a credit on a dependent child, is it likely that she will have income after she graduates which allows her to use a college credit?

What are the costs of waiting?

Is there a cost associated with delaying the tuition payment? The University of Maine accepts payments through the first business day in January; after that there is a late fee. Other colleges set earlier dates, so a delay could involve late fees and might require calls to make sure classes are still set. And some colleges set terms, so shifting years is not an option.

If you won't get more credit this year, and there is no cost to delay payment into next year, why not do that? If you do, document, document, document. When you file this year, include a note showing the amount you paid toward tuition in 2015, as the 1098-T issued may show the amount billed, not the amount paid. Keep the records from the bursar's office for both years showing exactly when payments were made. Finally, make sure that you remember this credit for next year's return, since probably no 1098-T will be issued then.

It's not for everyone, but in certain circumstances there can be an extra $2,000 in tax credits by delaying that last tuition payment. Be sure to do your homework, reading IRS Publication 970, 'Tax Benefits for Education' or check with your tax preparer before sending in you last check.

[Offset box]

Anne Powelson is a tax preparer for H&R Block in Bangor. Send your questions or feedback to This e-mail address is being protected from spambots. You need JavaScript enabled to view it or 207-947-0333.

208 comments

  • Comment Link Marthastuse Sunday, 19 November 2017 09:15 posted by Marthastuse

    online slots with bonus rounds
    casinos in us
    slots lv
    no deposit forex bonus 100 for free

  • Comment Link HerbertKib Sunday, 19 November 2017 02:34 posted by HerbertKib

    generic viagra versus viagra
    viagra without prescription
    pillola rossa viagra femminile
    viagra without a doctor's prescription
    do you have to go to the doctor to get viagra

  • Comment Link JohnnyDiume Saturday, 18 November 2017 13:49 posted by JohnnyDiume

    can u buy viagra walmart
    viagra without doctor
    where to buy viagra from
    viagra without script
    about generic viagra

  • Comment Link Davidjer Saturday, 18 November 2017 10:58 posted by Davidjer

    compra viagra online
    viagra without script
    best prices for viagra
    viagra without a prescription
    viagra buy china

  • Comment Link StewartNal Friday, 17 November 2017 06:13 posted by StewartNal

    viagra and cialis for sale
    cialis without a doctor prescription
    how to get cheap cialis
    cialis without prescription
    buycialis.eu

  • Comment Link Connaught Place Call Girl Service Friday, 17 November 2017 04:36 posted by Connaught Place Call Girl Service

    I have experienced your post and it appears like very interesting.Thanks such a great amount for setting aside the opportunity to write and share!

  • Comment Link DanielTeque Thursday, 16 November 2017 06:36 posted by DanielTeque

    buy viagra in uk no prescription
    buy viagra online
    generic viagra en france
    buy viagra online
    buy online viagra viagra

  • Comment Link ava Thursday, 16 November 2017 04:04 posted by ava

    the escorts in Delhi are really breathtaking companions for you. They gauge from every angle and hug and love you accordingly. While having interaction with them, do not hide anything from them. Let them know what you like and what you do not like. Even if you are novice, you will be provided guidance by them.http://www.escortsserviceindelhi.com/
    Delhi escort services

  • Comment Link avani mehta Thursday, 16 November 2017 04:02 posted by avani mehta

    the escorts in Delhi are really breathtaking companions for you. They gauge from every angle and hug and love you accordingly. While having interaction with them, do not hide anything from them. Let them know what you like and what you do not like. Even if you are novice, you will be provided guidance by them.http://www.escortsserviceindelhi.com/
    Delhi escort services

  • Comment Link Michaelwag Wednesday, 15 November 2017 13:11 posted by Michaelwag

    cialis cheap
    cialis prices
    buy cialis cheap generic
    cialis pills
    cheap generic cialis australia

<< Start < Prev 1 2 3 4 5 6 7 8 9 10 Next > End >>

Leave a comment

Make sure you enter the (*) required information where indicated.
Basic HTML code is allowed.

Advertisements

Website CMS and Development by Links Online Marketing, LLC, Bangor Maine