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Can I maximize my Lifetime Learning Tax Credit by delaying tuition payments to next year? |
Each year you can claim a tax credit of 20% on up to $10,000 spent on tuition & fees. The limit is capped at $10,000, so at most you can receive $2,000 credit each year. I pay about $7,500 tuition per semester, and after I pay the spring and fall amounts this year, I will be $5,000 over the $10,000 limit. I'd rather not lose the benefit for this amount, so I would prefer to delay the $5,000 payment until next year (assuming my college agrees, of course). Is this acceptable in the eyes of the IRS? I scoured the Federal tax forms, and many refer to making payments a year earlier than needed, but I haven't found anything about making a delayed payment. I assume you get the benefit during the year that you actually paid the tuition, not the year when it was incurred, but you know what happens when you assume.... Thanks for your advice. Per Publication 970, You would not beable to claim the monies paid for Tuition Costs incurred in 2007 on your 2008 return What Expenses Qualify The lifetime learning credit is based on qualified education expenses you pay for yourself, your spouse, or a dependent for whom you claim an exemption on your tax return. Generally, the credit is allowed for qualified education expenses paid in 2007 for an academic period beginning in 2007 or in the first 3 months of 2008. So If you held off paying the Fall 2007 Tuition until 2008 it would not qualify for the Lifetime Learning Credit on the 2008 return. See Publication 970 Lifetime Learning Credit, What expenses qualify http://www.irs.gov/publications/p970/ch0... |
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