Lifetime education credit

[BATiger]

Please correct me if I am wrong... students who don't work during the year, or maybe only made 1-2K during the summer, don't need to bother applying for the lifetime education credit because they don't pay enough income tax, right?
Not owing income tax = nothing to deduct from
If you are going to get a refund, that amount will not increase, since you don't owe.

I hope this makes sense, I apologize for my lack of basic tax knowledge.

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[dpmd]

The lifetime learning credit is not a refundable credit. This means if you didn't pay any taxes, you can't get any money back. However, if you had a part time job or whatever, you might want to take this credit.

Check this site to see if you have to file
http://www.irs.gov/individuals/article/0,,id=96623,00.html

This pamphlet discusses tax benefits for education
http://www.irs.gov/pub/irs-pdf/p970.pdf

You would have to file a 1040 or 1040A instead of an 1040EZ, but you can check here to see if you qualify for free e-file
http://www.irs.gov/efile/article/0,,id=118986,00.html

If you are getting a refund, it means you overpaid your taxes (people always get so excited about refunds, but it just means you gave the government an interest free loan for the year and you should change your W4 if it is a large refund). If you reduce the amount of taxes you owe (even though you already paid them) your refund would increase by as much as $1000.

 

[BATiger]

Thank you so much! I filed today and increased my return by $174! (I only made $2,000 last year) Every little bit helps, thank you for the info

 

[TMP-SMX]

Thank you so much! I filed today and increased my return by $174! (I only made $2,000 last year) Every little bit helps, thank you for the info

Unless you are an independent you won't need another deduction besides the standard deduction for dependents which is 5150. So unless you made more than that it makes no difference. So I'm assuming you are an independent or messed something up. Of course I always thought that the standard deduction for a single independent was 3300 so in that case it doesn't matter anyway.

 

[dpmd]

The credit is on top of your standard (or itemized deductions). That is why it is good for everyone (except for maybe those who make too much to qualify).