I claimed the wrong education credit on my taxes. I used Turbo Tax. It actually picked the credit for me.?

Question

It asked me if I claimed the Hope Education Credit in 2005. I didn't claim it in 2005, so I said no. The thing is I claimed it in 2003 and 2004. I am not done with my post secondary education. Technically I am a sophmore (college years). I am in the process of amending the return. Is this credit applicable for college years or tax years? Can I spend the refund amount now. Or do I need to wait for the ammendment to take place before spending any of the refund.

Answer 1

It depends on how much you spent in qualified education expenses. The Lifetime Learning Credit is a credit worth 20% of the first $10,000 spent on qualified expenses. If you spent over $7,500 on qualified expenses then the Lifetime Learning Credit is going to get you back more than the $1,500 max that the Hope Credit got you. However, if you didnt pay that much for school you might end up having to pay the IRS back some and spending the refund you already received would not be a good idea.

Answer 2

your first two years is the hope credit...not only is it limited to being used twice it is limited to the first two years, exp u r n your junior year for whatever reason you claimed the credit the freshman year then not the sophomore you can not now claim the hope just because you only used it once, now if there are say a couple years between your freshman and sophomore years then you can take the hope for each year...if your sophomore year however takes a couple of years to complete...sadly if you have already taken the credit 2 times then u must now start taking the lifetime learning credit
....the credit simply explained is up to 1000 for the first 1000 qualified exp and 20% after that up to max 2000 credit...
the lifetime learning credit u can take whenever and it is basically 20% of qualified exp up to 2000.
there is above the line credit for tuition expense which can also be used but there has only been one out of bout 500 returns i have done this year where the tuition and fees credit was more beneficial...
oh and if and when u start paying back your student loans....make sure u take the credit for the student loan interest

Answer 3

The Hope Credit is only available the first 2 yrs of college. After that you must take the Lifetime learning credit. If yoiu took the Hope for a third year, amend the return and claim the Lifetime learning credit instead. Good luck.