Okay, could you please give me your opinions on what would be my best option....the Hope Credit, Lifetime Credit or Tuition & Fees Deduction......I am a full time student, with my husband having the only income.....Married filing jointly with a MAGI of $35000......my tuition & fees are about $4000!!!!
2007-08-13 05:05:05 · 5 answers · asked by strtbikegrl 2 in Business & Finance ➔ Taxes ➔ United States
Are you in your first 2 years of college? If so you are eligible for either the Hope Credit or the Tuition & Fees Deduction. If you are past the first 2 years of college then you are limited to either the Lifetime Learning Credit or the Tuition and Fees Deduction. I would say most definitely that the credit is always better than the deduction. But both the credits and the deduction are income dependent. They phase out at a certain level, but with only a MAGI of $35,000 you are way under the income limits, so you would get either credit. I have attached information about the education expenses and the credits/deduction.
2007-08-13 05:15:04 · answer #1 · answered by Anonymous · 1⤊ 0⤋
Your income puts you in the 15% bracket so the "Tuition and Fees" deduction will probably only net you $600 ($4000 x 15%)
If you are a freshman or sophomore, the Hope credit can get you a credit of up to $1650.
If you are not a freshman or sophomore, the Lifetime Learning Credity will net you about $800.00 ($4000 x 20%).
Another caveat is that the tuition and fees deduction "may" effect your state return.
It would be rest to run the return multiple ways and see what gets you the best result.
2007-08-13 05:16:49 · answer #2 · answered by Wayne Z 7 · 0⤊ 0⤋
If you have no children then your taxable income is going to be approximately $18,000 if you do not itemize. This puts you in the 15% tax bracket with a tax liability of about $2,300.
Your tuition and fees deduction of $4,000 would be worth a $600 reduction in taxes.
The Hope Credit would reduce your taxes $1,650.
The LLC would reduce your taxes $800.
If you are eligible, do the Hope Credit.
2007-08-13 15:26:07 · answer #3 · answered by ninasgramma 7 · 0⤊ 0⤋
Hope credit will save you the most if you are eligible for that, then Lifetime Learning, then tuition and fees deduction would probably save you the least if anything in taxes.
2007-08-13 06:08:43 · answer #4 · answered by Judy 7 · 1⤊ 0⤋
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2016-11-12 05:11:34 · answer #5 · answered by olli 4 · 0⤊ 0⤋