My daughter graduated with her bachelor's degree. She works part time, lives at home and attends graduate program part time. We pay for her school with what's left in her 529 account. She has a small loan from her bachelor's program...nothing paid yet...still waiting to see what happens with Bidens forgiveness promise.
Are there any deductions or credits I should be looking for while using turbo tax....specifically for us
..the parents? Or her...the student...???.
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How old was she at the end of 2022? Did she earn more than $4400 in 2022?
You can claim a child, relative, friend, or fiancé (etc.) as a dependent on your 2022 taxes as long as they meet the following requirements:
Qualifying child
Qualifying relative
When you add someone as a dependent, we'll ask a series of questions to make sure you can claim them. There may be other tax benefits you can get when you claim a dependent.
They have to be your dependent under age 24 full time student, under 19, or any age permanently disabled; and claimed on your tax return if they meet the eligibility of your dependent, and you must provide for at least half their support for the year. If not, they will have to claim on their taxes. Not eligible for the American Opportunity Tax Credit because she has 4 years of college already. But, you are probably eligible for the LLC or Lifetime Learning Credit. Which provides a 20% deduction on up to 10,000 in eligible educational expenses. up to a 2,000 credit, non refundable, but deductible dollar for dollar on taxes due which could increase your refund or lower your tax liability. They must also select I can be claimed by someone else when doing the students return if you are indeed claiming them.
To claim qualified education expenses with the LLC or Lifetime Learning Credit which are:
The Lifetime Learning Credit is reduced when your modified adjusted gross income (MAGI) is between $160,000 and $180,000. You are not eligible to claim the Lifetime Learning Credit if your MAGI is $180,000 or more.
Note: Your MAGI is the AGI modified by adding back any: 1) Foreign earned income exclusion, 2) Foreign housing exclusion, 3) Foreign housing deduction, 4) Exclusion of income by bona fide residents of American Samoa, and 5) Exclusion of income by bona fide residents of Puerto Rico.
If you choose to claim the Lifetime Learning Credit, your credit is limited by your tax liability and other non-refundable credits. This is probably your biggest educational deduction/credit you will qualify for.
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