First time doing taxes

[ndi_amaka]

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I'm so confused. This is my first time doing taxes, my parents always did it before. I get my entire "income" from med school student loans.

So my first question is, do i have to file?
my second question is, what do i file under and do i apply for the Lifetime Learning Credit?


Thanks!

 

[mpp]

Loans are not income so you do not have to file a tax return for that income.

However, if you are not claimed as a dependent on your parent's tax return then you can file a return and claim the Lifetime Learning Credit that allows a refund of 20% of the first $10,000 of tuition paid. You do not need an income to qualify for this credit and the tuition can be paid with loans. You will need the 1098 form that is sent to you by the school. You then need to complete a 1040 form and an 8863 form.

 

[proman]

It's my understanding that the Lifetime Learning Credit is not a refundable credit. Meaning, unlike the earned income tax credit, the LLC can tax your tax liability down to 0, but not further. This is according to my CPA.

You can read Publication 970 which confirms this. I would suggest that if you've previously used the LLC to get a refund (without earned income) you should consult a CPA as to the best way to avoid penalties if you get audited.

 

[mpp]

Yes, I am mistaken. You must have a tax liability to claim the lifetime learning credit. If you do not pay tax you are not eligible for the credit.

 

[EM Junkie]

To the OP:

If you have not earned any income this year, you do not need to file a return. You will not get any money back, as previous posters have told you. However, you could have your parents claim you as a dependant again, file your Lifetime Learning Credit (LLC) for you, and then give you the $2000 max refund!

 

[edmadison]

To the OP:

If you have not earned any income this year, you do not need to file a return. You will not get any money back, as previous posters have told you. However, you could have your parents claim you as a dependant again, file your Lifetime Learning Credit (LLC) for you, and then give you the $2000 max refund!

Of course in order to do this, your parents would have to pay $10,000 of expenses covered by the credit.