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Post by deafpea on Aug 3, 2017 2:31:00 GMT
Hi peas!
Thanks for the advice on a computer from a previous post. It was very helpful!
I have another question, this time about tuition and taxes.
DD has some financial aid but we will still need to pay some of the tuition and fees. DD has been working all summer and has earned some money, so she can contribute to her college expenses.
We are looking at two options. Option one is: we (parents) pay the remaining tuition and fees and she pays for books, school supplies, initial food purchases (kitchen staples, etc) and living expenses. She will have a job while at school so she will have money coming in. Option two is: we split everything down the middle throughout the year (except for personal expenses, which she will pay for).
She will not have a car, and the bus system is free so there will not be any transportation expenses. She is living with her grandparents (my parents) so she will not have rent/utilities/etc.
I know that as a dependent, we can claim certain school-related expenses, tuition/fees being one of them. Which option is better, taxes-wise?
We do plan to get the opinion of a CPA. Just wondered what your thoughts/experiences are.
Paying the tuition/fees won't be a problem for us.
Thanks, you peas surely are a fountain of information. I learn so much here!!
Merilee
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Post by freecharlie on Aug 3, 2017 2:34:39 GMT
The irs doesn't care how you split it while you claim her as a dependent. If the tuition gets paid, you can claim the portion the irs allows.
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Post by Really Red on Aug 3, 2017 2:43:12 GMT
The irs doesn't care how you split it while you claim her as a dependent. If the tuition gets paid, you can claim the portion the irs allows. Yup, exactly this. My girls pay their books and all incidentals, including food (hardly too incidental, but not part of tuition) and I can still take it off on my taxes, because they are my dependents.
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Post by Basket1lady on Aug 3, 2017 3:05:21 GMT
We claim our college student.
We pay most of his expenses for school. He has a part time job, but it's only about 8-10 hours a week. He's there on a merit scholarship and is an engineering major. His job is to keep his grades high and keep his scholarship and work towards grad school. He has a job because we feel that he should have some skin in the game. That and the fact that he just does better when he's busy, rather than having an endless stretch of time to get things done.
DS pays for personal entertainment (movies, video game purchases, Target runs, baseball games, dinner off campus, etc.) We pay all of his transportation to/from school, including plane tickets/Uber/taxis/luggage fees. I don't ever want money to be a reason he can't come home, and he's at school 1,300 miles from us. We also pay if he goes to a relative's house for the weekend and takes an Uber there. Again, because I don't want money to be why he can't see family that's close to his school (and a $25 Uber ride is an entire shift for him.) We give him $10 a week for incidentals like toiletries, laundry detergent, cereal for his room, etc. But his meal plan reflects that as well. He's on campus 99% of the time, but we only pay for an average of 2 meals a day. He usually just has cereal in his room and he works for one of the cafes on campus and gets a free meal each shift.
Remember that if you take out any loans, they should be in your student's name. Debt forgiveness and company benefits will only pay for the STUDENT'S debt, not the parents' debt. You can still make their payments, but the loans themselves should be in the student's name.
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Post by dawncpa on Aug 3, 2017 3:38:06 GMT
Tuition follows the dependent regardless of how paid (a grandparent can pay it). If she is your dependent-you claim it. If she claims herself, then she claims it.
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Post by Patter on Aug 3, 2017 10:39:56 GMT
Yes, you can claim what's allowed. We have had 3 in college at the same time--one just graduated Summa Cum Laude with two degrees and a minor in May. We pay/paid everything for them. Our CPA itemizes it all for us. Now we will only have two to claim as the one that graduated has had a job since graduation and now lives on her own. I don't see it helps a whole lot but I guess whatever we can claim helps at least in some small way.
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Post by Scrapbrat on Aug 3, 2017 12:41:45 GMT
You have to be providing at least half of her support in order to claim her as a dependent on your taxes. If you are doing that, it doesn't really matter how you split it up. You can do whatever works best.
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Post by deafpea on Aug 3, 2017 17:01:19 GMT
Thank you, everyone! You are always so helpful!!
Merilee
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