Can an old college debt be tax deductible?

Question

This year I had to pay my old university back for the classes I took because I transfered to a new university. I could not get my transcipts sent to the new school until I sent them payment in full. I was unable to get a loan to pay for this so I cashed in some savings bonds and withdrew some money from my 401k. Is there anyway to off-set the penalties and interest that I encured since this was a school debt? I do have additional expenses for my new school already listed. Thanks!

Answer 1

In order to avoid the 10% penalty on the 401k withdrawal, the withdrawal has to be less than your qualified educational expenses. So it seems that you are exempt from the penalty. Attach Form 5329 to your return.

Tax on the savings bond interest may be excludible as well. Use Form 8815 to figure the exclusion and attach it to your return.

If there are additional educational expenses that were not paid with the 401k withdrawal or the savings bonds, you may be able to take a deduction or credit for those expenses.

Answer 2

If you took money out of 401(k) and informed the company as to why, you should be able to reduce your early w/d penalty. Also, the savings bonds you would only be taxed on the interest, not the whole value. Also, be sure to optimize between the Lifetime Learning credit and Tuition/Fee deduction. This year it may be wise to have accountant help you since each factor you mentioned has a wide variety of solutions that can benefit you depending on your situation.

Answer 3

that's larger to stick to for medicaid. Does your son have a job? he could have the skill to pass on incapacity if he gets reward. If no longer, try utilizing for medicaid, purely to be on the risk-free section. sequence companies will harrass you like loopy, because of the fact they do no longer care that your debt is wellbeing-appropriate, their activity is to convey jointly. yet another advice is to get some form of alarm/pager to attach on your son, so he's reminded to take his meds on the time he's had to. earlier concluding that your son is "stupid,"additionally ask him if he's experiencing any section outcomes from the meds or if there are the different clarification why he's no longer taking them (as properly forgetting). possibly he would not like what the medicine is doing to him, and if changing a medicine is a threat, have him ask the wellbeing care expert approximately it. changing meds could make a distinction. (if he's in college, he's no longer that stupid, and being in college is approximately youthful adults getting to grasp a thank you to guard themselves, varied youthful adults think of they're invincible at this element of their lives and it takes issues like journeys to the emergency room, or identifying between a selected driving force or calling a cab to help them be taught.) My mom and father have been very hesitant approximately utilizing for medicaid at one element after my father began dialysis remedy, yet while they did no longer, they could have been in intense worry.