<p>I understand that the Hope IRS Tax Credit can cover up to 1500 of tuition. But the catch is that it can only be used twice (Freshman COllege and Soph College). I am currently a Senior in HS, and I took a summer class at my local college (400 dollars in tuition). Would it be a waste to claim that Hope credit instead of using for Freshman Year in college where there would be much more tuition? Or can you actually claim it more than twice for your IRS Form?</p>
<p>And I keep hearing from friends that college textbooks you buy can be tax deductible. I asked my parents to ask their tax preparer about this, but the tax preparer says it cannot be done. I spent a lot on school books last year. Are they tax deductible? How can I (I earned sizable income in 2004) or my parents claim them? </p>
<p>You cannot claim the Hope Credit for the class you took over the summer. For the Hope credit, you must be a full time college student. Books are not deductible, nor can you get credit for them, unless maybe they are required for your job educatin and then deductible on schedule A as misc itemized deductions. I'm guessing you don't itemize. The hope credit is 100% of the first $1000, and 50% of the next 1000. So to get the ful 1500 credit, you need $2000 of tuition.</p>
<p>What do you mean by sizable income? Because the only person who can get the Hope credit is the one who claims you as a dependent. That's probably either you or your parents. But the catch is, that if your parents make too much (about $109,000) they can't take the credit even if they claim you. If you don't make enough (about between $8000 & $23,000) you can't get the credit even if you claim yourself, because it's a non refundable credit. Meaning that it reduces your taxes, but you won't get it back if you have no taxes to reduce. </p>
<p>So what you have to do is be careful of what years you take it. And it's true you can only take it twice. You can take it your freshman or sophomore year. You are a freshman or sophomore the year you graduate from high school (if you start college that fall) the whole next year, and then for winter term that third year. So you can take it 2 out of those three years. But after that (or if your parent's income is too high) you can get the Lifetime Learning credit or the tuition reduction.</p>
<p>My parents are asian so they don't know much about tax filing. And I have just heard about the credit and started reading about it. I guess I missed the part where you have to be a full time student. When I said sizable income, I meant that I made a lot of money last year (relatively for a HS Senior), and I paid 1750 in taxes by only claiming myself, most of which I probably will not get back. My parents fall within the qualifying range for the Hope Credit. I (or my parents) will probably file it next year. </p>
<p>So about those textbooks, aside from filing them through the Hope Credit, can they be deducted elsewhere? Is it only schedule A Misc Deductions, or can I do it elsewhere as a student? </p>
<p>One more question please, who do you recommend to do my taxes? I have the ability to learn it and use taxpro or something. But do you think a 17 year old should attempt this, or should I continue having my parents' filer do it? </p>
<p>You do not meet the criterial for writing of the text boox because they were not purchased or used for our work (employment). Besides, you would have to file an itemized statement and it would only be written off if the total of what you itemized is more than the IRS standard deduction.</p>
<p>There are a number of tax preparation software that you can use. IMO, Turbo tax is very user friendly and goes through your return line by line.</p>
<p>Your parents will have to file their taxes including all business supplements because #1 its the law & #2 if you are going to be applying for any type of financial aid.</p>
<p>I beleive that if you claim yourself as a dependent on your own taxes, then your parents cannot claim you on theirs.</p>
<p>I haven't filed yet or gotten my tax software for this year, so I hope you don't mind me asking a question of the knowlegeable folks here. Is the $109K limit gross income or AGI? Thanks!</p>
<p>Sorry. typo. The Hope credit is phased out between $95,000 and $105,000 of AGI. Meaning that if you have the whole $2000 of tuition, you would get the entire $1500 at $94,999 and none of it at $105,000 and some of it in between. This income level also applies to the Lifetime Learning Credit. However, if you make over $105,000, but less than $130,000 you can take a $4000, tuition reduction. If you make between $130,000 and $160,000 you can take a $2000 reduction. This reduces your income by that amount and saves the tax on that. Sometimes it pays to figure out which gives you the bigger benefit.</p>
<p>The only place you can take books is on schedule A, and ONLY if they are required for your work, which is obviously not the case. Also cannot be taken for a first degree. And as Sybbie pointed out: in most cases your standard deductin would be higher.</p>
<p>If I were you I would have your parent's preparer do it the first year. For two reasons. First it would be beneficial to see where the greatest benefit would be. Whether taking the credit on your parent's return (and they claim you), or whether it would be better to take it on yours (and you claim yourself.) Obviously, to do that the same person would have to prepare both to coordinate. The second, is although you seem bright and can learn this, you don't have enough knowledge of this very complicated situation to do it yourself when this much money is at stake. After the preparer does it the first year, maybe you'll understand it better and you can do it yourself.</p>
<p>The other point is that the $1750 withheld is irrelevant as to what you actual tax is. Let's say your actual tax after preparing your return and not claiming yourself is $1500. So you claim yourself which reduces the tax to $1200. Now you can't take the full benefit of the Hope credit.</p>
<p>Frazzledad: do you mean can you take the Hope Credit, then the Lifetime Learning Credit and the Hope credit again in sequential years? Yes you can, as long as the Hope Credit is taken while still a freshman or sophomore and only twice. And of course, while a full time student.</p>
<p>Another point someone might want to consider is that the Hope Credit is a maximum of $1500. But the Lifetime Learning credit is a max of $2000. So if tuition is over $7500 (and we all know it can be), Lifetime might actually be higher.</p>
<p>Or do you mean can you claim the Hope Credit for two years and the Lifetime until they are done? Yes you can. You can take Lifetime (or tuition deduction) as long as they are in school and meet the rules.</p>