file an extension or just pay everything???

Question

I am a grad student and received a scholarship that I shouldn't have by mistake. The school didn't catch it but I did and I gave the money back. (yeah, stupid me for doing what's right). Anyway, I paid all of my tuition but the school's tax records still show the scholarship which isn't allowing me to claim the lifetime learning credit. I've contacted several people at the university and they said they can get the info fixed but told me to file an extension on my taxes because it'll take a while. They won't give me a figure to work with, either. As is my husband and I will owe almost $400. Claiming the lifetime learning credit, we will owe under $200. If I pay the full amount now, when the university fixes their mistake can I get reimbursed from the IRS for my overpayment or do I have to wait until next year? I really need this money b/c I am changing jobs and moving away!

Answer 1

File the extention and if you are sure you will owe under $200 pay the $200 now. If you are not 100% sure of the amount but you know it will be under $400 then pay the $400. You are required to pay any estimated taxes on or before 11:59pm on April 17th(tonight). If you don't pay the amount now you will be hit with penalties and interest when you file the actual return.

Then when you actually file the tax return you can get the refund on any overpayment. Such as if you paid $200 but found you only owed $150, you would get a refund of $50. But you won't get any refund until you actually file your taxes.

Answer 2

You'd be able to get reimbursed if you pay it now, but the school gets things fixed within the next three years. You'd then file an amended return and claim the credit that you have coming.

Getting mistakes straightened out once they've happened can take some real work!

Good luck, in your studies and in getting the paperwork mess sorted out.