Hey, everyone. Went back to college this year (2020) and this will be the first time that I've been in college that I've been doing my own taxes and I have a question or two or ten. lol
I got my invoice a month or so ago for the Spring 2021 semester. I'm met with the conundrum of whether I should pay those fees now, in December 2020, or wait until January 2021 when they are officially due.
The reason I'm asking myself, and now you guys, is for tax purposes. I've got the money to pay it, but I just want to maximize my tax return.
If I understand the criteria for the AOTC correctly, it looks like it takes $4,000+ of "qualified expenses" (tuition, required enrollment fees and course materials needed for course of study) to get the maximum $2,500 credit. I just tallied up my expenses and it's at $5,067.19 WITHOUT paying the Spring '21 semester. So, is that basically all there is to it to get the $2,500 credit? I meet all the other criteria (valid SSN, not a convicted drug felon, etc. etc. etc.) Next semester's tuition is just over $3k....there wouldn't be any tax benefit to pay that this calendar year, right? Or would there be?
I should probably note that I work for the Oklahoma state government full time, work for my church part time, and also have rental property that I operate under an active LLC as a sole-proprietorship. I am single, not a dependent, and do not have any dependents.
Thanks!!!
