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urdncrlv
New Member

I want to take the tuition deduction not the lifetime credit

it shows I get $4000 for the tuition deduction and $2000 for the lifetime credit - so I want to take the $4000 deduction as that is higher...... but where do I do this?
1 Best answer

Accepted Solutions
ChristinaS
New Member

I want to take the tuition deduction not the lifetime credit

The Tuition and Fees deduction is not better. A credit is dollar for dollar, so is generally way better than a deduction.

A deduction reduces your taxable income. So, if your taxable income is $4000 less, you'll save:

$4000 * (your tax rate). Lets say your tax rate is 15%: you'll save $600. You do not save $4000, as a deduction is not a credit

An LLC saves you $2000 in taxes, as its a credit.

In this example, its $2000 for LLC vs just $600 in actual savings from the T&F.

The program wouldn't choose the LLC if it wasn't the better choice.

View solution in original post

1 Reply
ChristinaS
New Member

I want to take the tuition deduction not the lifetime credit

The Tuition and Fees deduction is not better. A credit is dollar for dollar, so is generally way better than a deduction.

A deduction reduces your taxable income. So, if your taxable income is $4000 less, you'll save:

$4000 * (your tax rate). Lets say your tax rate is 15%: you'll save $600. You do not save $4000, as a deduction is not a credit

An LLC saves you $2000 in taxes, as its a credit.

In this example, its $2000 for LLC vs just $600 in actual savings from the T&F.

The program wouldn't choose the LLC if it wasn't the better choice.

View solution in original post

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