topic Write Off's in Education

Write Off's

Carlos 21 — Tue, 18 Aug 2020 16:17:56 GMT

@I'm trying to determine if I qualify for writing off a new laptop

that I need for online classes and how much I can write-off. I have read 2 different articles one that says of to $1000 another that says up to $2000 using the lifetime credit when I'm a little bit confused

Re: Write Off's

Hal_Al — Wed, 19 Aug 2020 11:55:23 GMT

Simple answer: Yes. A computer, required for class work, is a qualified expense for claiming the American Opportunity Tax credit (AOTC) . To qualify for the alternative Lifetime Learning Credit (LLC), the computer must be purchased from the school. The AOTC is not available to grad students.

A computer is not a qualified expense for the alternative Tuition and Fees deduction (TFD).

The AOTC is a maximum of $2500, $1000 of which is refundable. It only takes $2000 of expenses to get the first $2000 of the credit. It only takes $4000 of total expenses to get the maximum $2500 credit. So, if you already have $4000 of expenses (tuition, fees and books), claiming the computer will not get you any more credit. Or if you already have $2000 of other expenses, the computer will only get you 25% back and only up to $500.

The LLC is 20% of expenses and a max of $2000, based on $10K of expenses.

Re: Write Off's

Texas Roger — Tue, 18 Aug 2020 18:22:30 GMT

There is no direct writeoff for the purchase of a computer for either the Lifetime Learning Credit or the American Opportunity Credit. You can claim a computer as a part of the expenses claimed for the American Opportunity Credit in the following situation:

Q7. Does a computer qualify for the AOTC?
A7. It depends. The amount paid for the computer can qualify for the credit if you need the computer for attendance at the educational institution.

The limit for all qualified education expenses per tax year is $4000 for the American Opportunity Credit. Qualified expenses include tuition and fees, course-related books and supplies. $4000 of expenses would qualify you for up to $2500 of credit.

The computer is not qualified expense for the Lifetime Learning Credit unless you are required to buy it directly from the educational institution.

See this IRS article for more info: https://www.irs.gov/credits-deductions/individuals/education-credits-questions-and-answers