Maximize AOC in year of graduation - Pay tuition in Jan

Key tips and advice the working tax pro can use.
#1
Wiles  
Posts:
5182
Joined:
21-Apr-2014 9:42am
Location:
CA
Most of my clients have AGI above the limit so they get no tax benefit for college tuition. Sometimes, we can pass this benefit to the student if they are working while they go to school. However, most of the students will not begin making real money until they graduate.

Generally, a student will graduate in May/June and they (or their parents) get billed for their final semester in December of the prior year. If the tuition is paid in December, then there will be no qualifying expenses in the year of graduation.

If possible, defer that tuition payment into January (or at least defer $4,000 into January). Unfortunately, some colleges make this impossible as the student cannot register for classes until their tuition is paid.
 

Return to Tax Prep: Important tips and advice



Who is online

Users browsing this forum: No registered users and 3 guests