How do I answer this? Your total qualified education expenses are $25,871. Enter the amount you want to use to calculate your education deduction or credit.

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I am a full time college student. Dependent. This is what comes up on my screen right now with question and example below. Still confused on how to answer this.

Amount Used to Calculate Education Deduction or Credit

USAA Federal Savings Bank

Your total qualified education expenses are $25,871. Enter the amount you want to use to calculate your education deduction or credit. For example, since the first $4,000 of qualified expenses may generate an American Opportunity Credit, you may choose to enter $4,000 in this field. The resulting tax credit may be more beneficial than the forfeited exclusion from income. Amount Used to Calculate Education Deduction/Credit is auto filled with a figure of $10,000. I have no idea what to do.

537

New Member

Jun 4, 2019 4:56:21 PM

It sounds like you had a distribution from a 529 plan or ESA to help pay for your education expenses. You can use your education expenses to take get a credit or exclude the income on earnings distributed from the education plan. The program is allocating $10,000 of your education expenses towards getting a credit and the rest towards excluding the income on earnings from the plan. I think I would just leave the allocation as is. The maximum expenses you can have towards an education credit (Lifetime Learning Credit) is $10,000. The remaining $15,871 is allocated toward the earnings which I doubt were that high. I think the $10K allocation is optimal for you.

This screen just allows are users who may have lower education expenses to allocate the amount manually that may work best for them.

Returning Member

Jun 4, 2019 4:56:22 PM

So why does the question also suggest to put $4000 in that field ? Is $4000 better or $10,000 ?

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How do I answer this? Your total qualified education expenses are $25,871. Enter the amount you want to use to calculate your education deduction or credit.