Thought I had a simple question, but can’t seem to find a straight answer to this.
In general, for a normal four year degree, over 5 tax years (college attendance started 9/2010, finished 5/2014), can I take the American Opportunity Tax Credit for the first 4 tax years (2010-2013), and the Lifetime Learning Credit in the final year (2014)?
For my specifics, he will be a dependent in 2014. If the answer is yes, his last 1098-T was issued in 2013, but indicates that the tuition includes 2014 tuition. I am assuming this would be the auditing document for the irs for the 2014 tax year.
Seems to me that this would be double dipping, and not allowed, but I’m not sure.
Thanks for any insights.
What is important is the years that you paid expenses. If you paid expenses in each of the first four years, those expenses can be applied toward the AOC. Expenses then paid in the fifth year could be applied to the Lifetime Learning Credit.
Yes, in my case, I paid the tuition over the 5 calendar years, so I meet that criteria - just seemed strange not being able to find this strategy on the internet.
Thanks for the input.
Fewer people qualify for Lifelong Learning credit. If you do, you can take it, you just can’t take both for the same student in the same year.
The lifetime learning credit is actually easier to qualify for and is not limited to 4 years (but is less valuable and has a lower MAGI limit).
See IRS Publication 970.
That’s what I meant as harder - the lower MAGI limit. It’s pretty low (I’m single and it would be hard to live on that).
Remember, though, that the 1098-T only reflects tuition and does not include mandatory fees/expenses that could be part of the credits. Don’t use the 1098-T as your sole source for what you can deduct. The 1098-T is for the colleges to report whether or not any disbursements from their endowments went toward tuition. It does not jive with what you should be deducting.
And your situation is uncommon, as the general rule would be that the student who graduates in 2014 might not still qualify as a dependent (if the graduate becomes gainfully employed upon graduation, he/she supports himself/herself for more than 1/2 of the year) for the rest of the year.
Thanks all. I had originally assumed that since my son completed his degree in 4 years, he would be eligible for only 4 years of tax credit - but apparently I am eligible for the 5 calendar years - just very surprising, as the tax code never seems to work in my favor 
For my situation, I had previously taken the 4 year AOC credit. For 2014, I will not claim him and he has enough income to take the Lifetime Learning credit (if i were to claim him, my income would not let me take this credit). I only became aware of the lifetime learning credit after running his numbers thru Turbo Tax, and wanted to confirm I did not mistype something into the program.
Have him run his taxes with the LLC, and also with the deduction for tuition and fees (line 34 on the 1040). Usually the LLC is the most advantageous, but sometimes the deduction works out better.