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Income Tax Question

danny_l_2005

Proven Member
511
1
Mar 23, 2004
weslaco, Texas
I'm a dependent and also a college student; I received my 1098-T form as I paid last year's tuition, but because I am a dependent TurboTax tells me I can't use it. I wish I could so they won't deduct any taxes from my withholding, but I can't :( . My question is, if I can't use it then does my parents steal my tax deductions (Hope credit)? :(
 

VETTE_50_TH

Banned Member
3,735
22
Jun 24, 2004
Columbus, Ohio
I would use the Hope. I did last year. I got back like 1800 bucks.

James :laser::talon:
 

Defiant

DSM Wiseman
34,764
185
Jan 13, 2003
glorious Galt, California
If you're getting a tax refund, your deductions are set up incorrectly. Don't give the effers free money to use for a year. Take your wages when you get them.
 

housegsx

Proven Member
2,455
35
May 28, 2004
Greensburg, Pennsylvania
But I like the disillusion of thinking I won the lottery. :p

I've been using the 1098-T or -E, whatever it is for student loan interest for years. It helps a tad. Covers my local taxes.
 

BK85

Proven Member
259
2
Jan 9, 2006
Colorado Spring, Colorado
Crap, that sucks for me. Thanks

If you are a dependent than I'm guessing you live at home.

Probably rent, utilities and most food free.

And did you or your parents pay some or all your tuition and books?

I seems to me your parents deserve that deduction.

Sorry if I seem to be ranting, but I'm in the opposite position, having a college student living at home. We pay the tuition, books, most food, car insurance and he has no job at all. :mad:

BK85
 

danny_l_2005

Proven Member
511
1
Mar 23, 2004
weslaco, Texas
I paid my whole tuition and books, I pay my bike and CC payments. But I understand what you mean.

Defiant how is my deductions set up incorrectly? I know the government uses our money for a whole year with no interest but the government helps me not spend it for a whole year. I rather get hundreds of dollars back at the end of the year than getting around fifty dollars a paycheck and spending it on beer.
 

the_mork

Proven Member
2,619
25
Mar 10, 2008
Eau Claire, Wisconsin
Or you could use some financial discipline, put about as much money away every month as you would send to the government under your current profile and take the interest that you earned on that money right home and into your pocket.

I understand what you mean though, some people don't have the initiative or financial discipline to figure out how to set up their deductions properly and not get into a mess at the end of the year. It is even harder if you are uncertain about what your status will be at the end of the year or if your income will remain steady.

What you should discuss with your parents is whether they would be willing to pass the money back to you since it was your actions and payments that allowed them that credit, and if not then consider it payment for room, board, and medical insurance. Remember, someday you might be claiming them as dependents. Either way the extra money in their pockets will likely come back to you in some way if they are still letting you live in their home, or convince them to spend the money on something that you will all enjoy like a TV, computer, or vacation.
 

tsidrift1

Proven Member
819
2
May 12, 2004
Decatur, Illinois
When I was in school, I did stay at home, but that was all that was provided for me. I bought my own food and paid my every way myself. My mom allowed me to claim myself. I was getting about 1600 back every year. The 1098 for me basically gave me every bit of tax they took from me, I got back! Now that Im out of school and living on my own, the refund isnt that great! LOL

Anthony
 

mikeydsm

Proven Member
154
1
Jun 18, 2002
River_Edge_NJ
I am an accountant and I can tell you this, if you are a dependent you do not qualify to use the 1098T. Your parents may use it but you can't, as by you being their dependent, it is implied (whether it is true or not, it's the IRS) that they pay for your school and support. The HOPE credit is only available, again if you are not a dependent. If you claimed the HOPE credit as a dependent, you're very luck that you haven't been audited, which can happen up to 3 years after said tax return has been filed. Your best bet is to have your parents use the 1098T and give you some of the money they get back for it.

It is near impossible to set up your taxes to not receive a refund if you are claiming the HOPE credit, as it is applied AFTER your tax owed/refund, it is not a deduction. IE, even if you have it setup so that you are paying the correct tax dollars and do not receive a refund or a tax owed at the end of the year, by claiming the HOPE credit, your going to receive money back regardless. This is because it is assistance to help you pay for your schooling.
 

danny_l_2005

Proven Member
511
1
Mar 23, 2004
weslaco, Texas
Thanks I'll tell them to help me buy parts and tools to get my dsm working. 0psi on cylinder 1 :(
 

AWD_Launch

Proven Member
308
2
Feb 12, 2006
Spokane, Washington
I'm in the exact same situation and my parents get all my college refund, but my dad and I talked about it and he usually give it back to me because I pay all my own bills, food, etc. I just don't pay for rent or utilities. Since the government says he makes too much for me to get any scholarships we call it even (I get free rentmbut pay for college and everything else and get my tax return back eventhough he claims it).
 

Defiant

DSM Wiseman
34,764
185
Jan 13, 2003
glorious Galt, California
But I like the disillusion of thinking I won the lottery. :p

Cool. PayPal me $400 a month, and I'll send you a big win in a year. :rolleyes:

Defiant how is my deductions set up incorrectly?
Crank up the number of dependents you claim on your W-2 to about eight, and your deducted income tax will drop down to where it should be.
I know the government uses our money for a whole year with no interest but the government helps me not spend it for a whole year.
Yeah, it's just a pain in the ass to have to grow up, isn't it?
I rather get hundreds of dollars back at the end of the year than getting around fifty dollars a paycheck and spending it on beer.
Then set up payroll deduction for yourself. If you work someplace that offers deferred compensation, it comes out before the tax is figured so you effectively hide about 80% of what you're saving.

Learn to work money so you don't have to work as long.
 

the_mork

Proven Member
2,619
25
Mar 10, 2008
Eau Claire, Wisconsin
You can also save by putting money into an employer sponsored retirement account. When I first started working I put 50% of my wages into a 401k plan for about 3 years when I didn't really need the income (high school). Now I still put in 8% even when every dollar counts. The cool thing is that with the amount of money your employer matches (if they are generous) and your tax deferral you end up with a significant amount of money set aside that works on making more money in a wonderful snowball effect that can help pay for college (though it is a little late to start it now). 401k funds can be pulled out for a first time home purchase, qualified tuition expense, or retirement without penalty (just pay the taxes). Which means that you could not only have that money during the year but you could use it for a spending blitz come tax time (by withdrawing for spring semester) and keep your earning in a retirement account to save for the future. The only caveat is that you are excluded from making deposits to your retirement plan for one year after you withdraw so you might want to go for an extra large payout in two years rather than a normal tax-return sized payout in one year.
 

housegsx

Proven Member
2,455
35
May 28, 2004
Greensburg, Pennsylvania
I still like getting a bunch back at the end of the year. I'll pass on the $0.45 of interest to let them do my accounting.

Mork, I didn't know you could take money out of a 401k penalty free for 1st time home purchase. I plan on buying in the spring so it's nice to know that option is there should I want to take it. :thumb:
 
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