Thank you so much for your detailed reply. This has been a long, confusing journey and your advice brings clarity to our situation.
Regarding coming up with $76 more in expenses...I think we can do that! Daughter's Room & Board expenses, $5329, was paid to the college since she lived in the dorms on campus for the first half of the year (Spring semester). When she returned to school for the Fall semester, she moved into an off-campus apartment. None of that R&B money appears in the 1098, but I have receipts and records.
Between my wife and myself (filing jointly), our income is somewhat high, so I don't think we even qualified for the Tuition Credit. It did not come up in TT when I prepared our tax return, and I have already filed. At this point, I don't think I would want to file an amendment.
Do you have any suggestions for the current tax year, 2023, regarding claiming or not claiming our daughter as a dependent? This is new to me, and I am not sure how to navigate the "Dependent" question. She is turning 21 in May, and is expecting to graduate by December 2024. My wife and I are trying to let her take on more responsibility (living with college roommates, out of state), and to experience the reality of going to school, earning a living, and paying taxes. Of course, we will provide a safety net if she finds herself in financial trouble. Just wondering if it would make sense to NOT claim our daughter as a dependent and then she could possibly reap the benefits of the AOTC and/or other tax advantages next year. I'm not sure where the trade-off is.
Q1: If we (my wife and I) do not claim our daughter as a dependent on next year's taxes, we would likely lose out on some tax breaks, but would that result in certain advantages for our daughter?
Q2: If so, would it be a by a long shot? (Probably difficult to answer this without knowing our tax situation, but just asking in general.)
Thanks again!
