Major life milestones often have a major tax impact. Changes in your marital status, having a baby or adopting a child can have significant impact on your taxes. This is the place to ask questions about dependents, real estate, and other various scenarios that play a significant role in what taxes you pay.
12-27-2017 09:34 AM
Hello, I am beginning Graduate School in January 2018. I have received grants that will cover all the tuition. Would I still be able to claim any deductions for being a full time student? Also, I have purchased my books and paid application/student fees in November/December 2017. Am I able to count those expenses on this year's taxes or will they need to be on the year that I actually am enrolled in school?
Lastly, I am distance ed student but will be commuting a few weekends for intensives on campus. Am I able to deduct my housing and travel expenses since they are required for the courses?
Thanks for any advice/direction.
01-09-2018 10:38 AM
Welcome to the H&R Block community.
The cost of textbooks that you purchased out-of-pocket directly from your educational institution and required fees that you paid out-of-pocket can be used to calculate the Lifetime Learning Credit. If you report the scholarship & grant income as taxable income you could then add the tuition expense that it covered to your total expenses for calculation of the LLC. You may not have to report all of the scholarship & grant funds as taxable income to get the full credit. In order to get the full credit your out-of-pocket expenses would have to exceed your grants and scholarships total by $10,000, so if for example you have $2,000 worth of out-of-pocket expenses and you have $15,000 worth of scholarship funds you would have to report $11,500 of the scholarships as taxable income so that your numbers end up being $3,500 for untaxed scholarships and $13,500 for out-of-pocket & qualifying expenses.
You cannot use room & board, travel, or meal expenses to calculate education benefits. These are not qualifying expenses for any student and are not required by the educational institution in order to attend classes but rather they are necessary to you because you don't live in the immediate area.
The Lifetime Learning Credit is worth up to $2,000, all non-refundable. It is available to graduate students and anyone else who is beyond their first four years of college. You can claim it for any type of education that leads to a degree or certificate. The LLC is claimed and calculated on Form 8863.
If you have any other questions I'll be glad to help.
Senior Tax Advisor (Tampa, FL)
01-25-2018 03:11 PM
Thanks LouisH for your help. One follow up question: If I do not start classes until January 2018, I would not actually put this on 2017 taxes, correct? I purchased books (but not directly from school) and paid some fees in 2017 (but not a lot). The grant, scholarship and tuition go towards classes that don't begin until 2018.