topic Yes, you can use the cost of the tuition. For the purpos... in Retirement tax questions

What qualifies as higher education to avoid 10% early withdrawal penalty from my IRA

ryan-m-nielsen — Fri, 07 Jun 2019 22:46:30 GMT

I took money from my IRA to pay off some debt. My wife is currently in school and we are using student loans to pay for school. Can I use the cost of her tuition for high education deduction to lower the amount I have to pay the 10% penalty on?

Yes, you can use the cost of the tuition. For the purpos...

MargaretL — Fri, 07 Jun 2019 22:46:32 GMT

Yes, you can use the cost of the tuition. For the purposes of the 10% additional penalty exception, higher education means costs of tuition, fees, books, supplies and equipment to a post secondary school (college, university, vocational schools) eligible to participate in a student aid program administered by the U.S. Department of Education. It includes virtually all accredited public, nonprofit, and proprietary (privately owned profit-making) post secondary institutions.

Note: living expenses are not allowed for the additional 10% penalty tax exceptions on early distributions.

The Note is incorrect. According to the IRS room and boar...

kyledbrock — Fri, 07 Jun 2019 22:46:33 GMT

The Note is incorrect. According to the IRS room and board are allowed without penalty as long as the student is at least a half time student.

is this still correct for 2018? Also what if the student...

s-zeidan — Fri, 07 Jun 2019 22:46:34 GMT

is this still correct for 2018? Also what if the student gets off campus housing?

Yes, that's what Publication 970 says for 2018. It says...

donnajenn — Fri, 07 Jun 2019 22:46:36 GMT

Yes, that's what Publication 970 says for 2018. It says you are allowed up to the "customary rate" for your university. Just really didn't know how to document when filing online.

Fees, books, supplies, equipment, etc. must be required f...

masimone — Fri, 07 Jun 2019 22:46:41 GMT

Fees, books, supplies, equipment, etc. must be required for enrollment. Also, computers, software, and internet might qualify as higher education expenses for purposes of the 10% penalty exception.

Re: Yes, you can use the cost of the tuition. For the purpos...

djslelledge — Mon, 23 Sep 2019 21:14:18 GMT

Would this include paying off a Parent Plus Loan. Example: $10K parent plus loan awarded and deferred until graduation. The tuition portion is $10K and interest is $3K for a total owed $13K. Would you be able to use a traditional IRA early distribution and avoid the 10% on the full $13K?

I understand the $13K would be added as taxable income. Correct.

Re: Yes, you can use the cost of the tuition. For the purpos...

dmertz — Tue, 24 Sep 2019 12:06:32 GMT

No. Loan repayments are not education expenses even though the loan may have been used to pay education expenses.