This discussion was created from comments split from: FAFSA divorced parent custody question.
I am currently in the same position as original post. 1 in college at ND who her father has claimed. My younger daughter I claim. Youngest daughter is a Sr who is residing with father the entire school year as I now live one hour away. For previous tax years everything worked so that we each claim one child. 8 of the colleges daughter applied to only require FASFA. 3 others will require CSS profile. Husband will now claim both girls as they will spend the majority of 2015 with him. Oldest daughter spent summer split between both households, and so far the majority of her first semester at ND.
CSS profile schools we show three adults with income, which is fine.
But if younger daughter chooses FASFA ONLY SCHOOL…then we want the benefit of my ex husbands tax return. Hoping that makes sense. We will not be pell eligible anyways. I was hoping to be able to write off my portion of education contributions. Ex husband has control of our prior jointly owned 529 plan. I am required to pay my share from divorce funds and future income.
So my thoughts are my current husband and I have no tax write off unless I file married filing as a single. Does that make sense? Tax accountant hasn’t gotten back to me.
Taxes are irrespective of who is considered custodial for FAFSA (or the Profile). You can still work out an agreement on who has which child for taxes. The FAFSA will be based on which parent the child lived with the most. The two (taxes and FAFSA) can be different parents.
I believe the AOTC can only be taken by a parent taking the child as a dependent, and I know it cannot be taken by a married person filing separately, so the parent in post #8 could not ‘write off’ her portion of her daughters’ expenses.
@twoinanddone: my concern was the write off portion. I make significantly less than ex husband. Current husband puts both daughters out of the realm of financial aid.
My senior has a few D2 schools recruiting her, but no mention of scholarship dollars until November I believe. Merit+athletic=?..
If ND we now weigh in the price for 2 at ND and no merit, no athletic…the first is a stretch the second will be almost impossible unless we get a reduction for 2… Mom is counting every penny going out and coming in.
With no tax write off…more than likely no refund…and quite possibly will have to pay taxes…daughters could end up with small loans…
For future reference, start your own thread @wiseacre.
When will the divorce be final? Or are you already divorced, remarried, and getting divorced from 2nd husband? Your marital status is unclear. First you refer to the father of your child, then later you say your husband will claim both daughters, then you talk about ex husband and at the end of your post, you say current husband.
As noted above, you can’t claim the AOTC with MFS status, but you could with HOH, although note that the credit phases out. What is your AGI?
Your last paragraph makes no sense.
Yes…I am divorced and remarried. Ex-husband has indicated it may be best for him to claim both for FASFA purposes. My current spouses income is very high, so we were previously told by accountant once we no longer claimed youngest daughter on taxes we would probably need to adjust for that. You mention many abbreviations… Not sure what they all mean. Hoh. Is phased out over how many years?
Last comment makes no sense to you: My tax return last year allowed me to use towards first semesters tuition. It was not much, but it helped.
Agi in my current household is 190,000
Ex husbands I am guessing is 70,000 to 90,000. Not sure on teachers pension or his current part time teaching position.
Your tax filing status is irrelevant for FAFSA purposes. In other words…it doesn’t matter who claims the kiddo on the taxes. For FAFSA purposes…only the custodial parent and spouse are included, wht any child and spousal support. The custodial parent is the parent with whom the child has LIVED most for the 12 months prior to,the actual FAFSA filing date.
The non-custodial parent can claim the kiddo on their taxes. Or not. Doesn’t matter at all for FAFSA purposes.
What does the above mean?
Tax returns are forms people file to report income and deductions.
Is ex-husband single or remarried?
Tax refund. From my tax returns… Ex is single.
If your ex-husband claims the college students as his dependents on his 1040 and gets the up-to-$2500/student American Opportunity Tax Credit, then I think that if you are each contributing equally or proportionately to the college costs, he should in effect give you your share of the credit OR if the students are taking loans, your ex-husband should give the student an extra amount equal to the tax credit your ex-husband received.
Aotc… Is that per student. So if you have 2 in college do you get to claim 2x?
Correct! If you ex-husband claims both kids as his dependents and both are in college and both paid $4,000 (or more) for tuition/books (but not room and board) NOT coming from a 529 plan (no double dipping on tax benefits for education), then ex-husband will get a $5,000 tax credit on his return assuming other conditions are met.
You can read more about the American Opportunity Tax Credit (AOTC) and other tax benefits for education in IRS Publication 970:
https://www.irs.gov/pub/irs-pdf/p970.pdf
I just wanted to point out the AOTC so that you are aware that your ex-husband is potentially coming out $5,000 ahead of you. If he gives the $5,000 to the kids in addition to his agreed-upon amount of support, then that would seem fair but if he keeps the money to basically supplement the amount he is supposed to contribute - well that’s another story.
How many years has the older child been in college?
D1 is in her first year at ND. Ex husband has the 529 plan that we jointly started 19 years ago. I will review the IRS address you have provided. I am not sure how the FA/ Merit breakdown is… The word Scholarship is listed on D1 paperwork. She has 2 from what I can recall. We pay the difference equally. D1 has no loans. But next year with D2 attending college, the 5,000 tax credit could and should benefit the girls first. I am trying to plan and appreciate your insight.
For D1 in her first year at Notre Dame - your ex-husband may be able to get a $2500 tax credit on his 2015 tax return if he meets the requirements* and files Form 8863. If either of you paid $4,000 in 2015 from non-tax-advantaged funds (non 529, for example) for tuition then it’s possible ex can claim the credit.
Here is another scenario: ff scholarships of at least $4,000 and 529 withdrawals covered her Fall 2015 tuition,completely your daughter could claim that $4,000 of the scholarships were taxable income to her (if she has no other income, she wouldn’t owe any federal income tax). This basically frees up the $4,000 to be ‘used’ for her father to claim the AOTC.
https://www.irs.gov/Individuals/AOTC
https://www.irs.gov/pub/irs-pdf/f8863.pdf
*What are the income limits for AOTC?
To claim the full credit, your MAGI,
modified adjusted gross income must be $80,000 or less ($160,000 or less for married filing jointly).
You receive a reduced amount of the credit if your MAGI is over $80,000 but less than $90,000 (over $160,000 but less than $180,000 for married filing jointly).
You cannot claim the credit if your MAGI is over $90,000 ($180,000 for joint filers).
@wiseacre: You mention pension - is your ex-husband collecting Social Security as well?
No social security. IL teachers pension
You know, wiseacre is divorced and the financial settlement is done. I don’t think she should be concerned with ex husband’s taxes or credits. Divorced. Over. Done. If she qualifies for the credits (and it appears she doesnt as new husband makes over the limit) then she could take it IF her daughter was a dependent, which she isn’t.
What people on CC think is fair really doesn’t matter. Tax law is clear the credit belongs to the filer who claims the dependent. If the ex wants to keep the aotc, it is his right to do so. If he wants to spend it on the tuition, he can do that too. It’s possible he doesn’t get the credit anyway since wiseacre said his income is just about at the limit.
I would be uninterested in discussing my taxes with an ex spouse.
@wiseacre You can consider the assorted opinions of random internet posters, or not. What twoinanddone or I or anyone else thinks matters, or is fair, is not relevant.
I don’t have an ex-spouse but I am always interested in discussing taxes.
One or both daughters might qualify to be your dependent (s) or might not. Perhaps parties are signing Form 2120 or Form 8332.