<p>Hi everyone,
I have been reading the threads on CC about the American Opportunity Credit for about a month now. I think I finally understand it but now that I have the tax returns filled out, I am panicking. My issue is that we do not have receipts for anything (paper trail) so I don't know if I can actually take the credit.
This is how I figured the tax and credit:
Cost of Attendance $19167
Scholarships $14603 ($3570 is earmarked for tuition)
Tuition/Fees $8151
Out-of-pocket $4564 (we did not take out any loans - my mother, myself & my daughter all contributed to the expenses)
I thought I would put $4151 of scholarships toward the tuition/fees. And the other $4000 tuition would be out-of-pocket.
That means we would pay taxes on $10452 on my daughter's tax return.
Does this sound ok so far?
Am I supposed to have receipts to the school that I paid the tuition directly to them?
Should I just forget the AOC and pay the taxes on the scholarships?</p>
<p>Any help would be greatly appreciated!
Thanks :)</p>
<p>Your paper trail would be your yearly payment summaries from the college which normally you or your student can easily access online and print. As long as the $4564 that you paid isn’t noted as a line item directly toward room and board I think your plan seems legitimate. It is somewhat unconventional because normally scholarships are applied toward tuition first, but I suppose if only $3750 are earmarked for tuition, and your itemized receipt doesn’t show what specific funds are used for tuition, then your interpretation is reasonable…</p>
<p>I’m assuming you also meet the AGI requirements to claim the credit. I think it’s $180,000 filing jointly. I wasn’t quite sure how to read your numbers. As planner03 said, usually scholarships are applied to tuition/fees, but some of yours was used for room and board apparently? If you really did pay greater than $2500 for tuition then you can claim the credit. A paper trail would only be necessary if you needed to prove that you spent the $2500 on books, etc.</p>
<p>Planner03… no the $4564 wasn’t paid to the school at all - just regular expenses, cost of living, etc for my daughter. My mom and I send her money to help her out - not paid directly to the school.
Yes I printed out our “account summary by term” and it doesn’t state which scholarships paid for what or even when. There aren’t any dates on it, it just lists all expenses and all scholarships by term. It’s not very detailed IMO.
Illinoismom4… yes I definitely meet the requirements for filing.
I don’t really know how the school applied the scholarships to all of my daughter’s expenses. I was just using the formula that other people on CC have used - Cost of Attendance minus scholarships = amount paid out-of-pocket (or by loan). Then claiming that amount toward the eligible expenses (tuition).
All I am saying is that I don’t have receipts because I didn’t pay anything directly to the school.
But…
One thing I did forget to mention in my first post was that we did have to pay $890 for summer tuition. It was a required class and my D did earn credits toward her degree but apparently her scholarships do not cover the summer term. So, we do have a debit from her bank account for that summer class. My D had book vouchers so we didn’t pay anything for books.
But I would of coarse like to take the full $2500 credit if possible.
Just don’t know if I am doing it the right way.</p>
<p>Did all of the money that covered all of the expenses posted in the Bursar’s statement come from the scholarships? As in your daughter did not take out any loans, did not write a check to the college for anything other than the summer class, and all of the money that has been spent by the three of you went to personal expenses?</p>
<p>In that case I don’t quite know what it is you should do with it. Can you take your question over to the Financial Aid Forum and have one of the scholarship gurus look at it? It might be that the only expenses you have for the AOC turn out to be the tuition, fees and books for the summer course.</p>
<p>I’m thinking that if you didn’t pay anything directly and can’t prove any other expenses like books, then the summer tuition is the only thing you can claim.</p>
<p>happymomof1 “Did all of the money that covered all of the expenses posted in the Bursar’s statement come from the scholarships? As in your daughter did not take out any loans, did not write a check to the college for anything other than the summer class, and all of the money that has been spent by the three of you went to personal expenses?”
Yes, that’s correct. </p>
<p>I think you guys are right about only claiming the summer coarse for the AOC.
I’ll go over to the financial aid forum & see what they have to say. </p>
<p>Thank you ladies for your opinions. It’s very much appreciated! :)</p>
<p>If scholarship is to your daughter, then any money after tuition is paid is income to the student (money for room and board). I don’t think you can use her tuition cost toward credit on your taxes unless you pay it the tuition.</p>
<p>I’d say summer tuition and books are all you can use. Talk to your daughter about receipts. My son used his credit card, so I used the cc statement as a receipt. That should lower what your daughter might owe. It’s been a while, but there might be other tax breaks for scholarships going toward room and board paid to the school.</p>