lifetime learning credit or tuition deduction?

[Fritz]

Does anyone know anything about the life time learning credit vs. the tuition adjustment. I guess I would like to know how much can you take off from your taxes, assuming that you have a spouse that works. If you take a loan to pay for tuition can you still take either the tuition dedution or the lifetime learning credit?
The tuition for medical school is really high, so how much credit can you take off the taxes for tuition. ( I am assuming if your spouse makes like 20000 a year, and you pay tuition 34000 a year, you can't really make an adjustment to income of 20000 because it will leave you with basically no income. Am I right?)

Thank you very much.

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[mpp]

The tuition & expenses deduction allows a maximum of a $3,000 deduction. It is worthless in comparison to the lifetime learning credit which allows up to a $2,000 tax credit. You cannot take both. The other education benefit is the student loan interest deduction. All of these have income limitations.

Take a look at Publication 970 on the IRS website to learn about tax benefits for students.

 

[Fritz]

So I guess it is better to get the lifetime learning credit.
When are they going to make tuition completely tax deductible?

 

[BlackPuma]

with regard to tax deduction..

I've been baffled by the financial aid office and every other person I talk to?

is it true, that your parents can claim you as a dependant, even if you claim yourself for financial aid as an "Independant"...

obviously, this means good tax benefits for the parent? I was under the assumption that if I file as an independent for financial aid and for taxes, then my parents cant file me as a dependant?

but i'm getting mixed responses..does anyone know?

 

[Fritz]

I don't know how this works, but my guess is that if you file as independent your parents cannot claim you as a dependent.
Plus, if you have family, the dependent status is out. I have kids, if let's say that my parents claim me as a dependent, then what are my kids, independent?
I think the dependency status only works until you are either 18, or 21 if you go to college. There has to be something in the IRS publications about this.

 

[mpp]

It is unlawful to file taxes as an independent if someone else claims you as a dependent.

 

[BlackPuma]

Originally posted by mpp
It is unlawful to file taxes as an independent if someone else claims you as a dependent.

ok you didn't quite understand me...

since I'm above or equal to 24 years of age, I'm categorized by the financial aid office as an "independant"...

when I file my taxes...I file as a "Dependant"...actually in reality..this year I didn't even have a job, so I'm not filing nutin..

so the question is can my dad file me as a "dependant" even though I'm not filing any taxes, and financial aid considers me as an "independant" for loans?

 

[mpp]

For your parents to claim you as a depedent, they must pass the 'support test' (link) which means they must have provided over half the dependent?s total support, including food, clothing, shelter, education, medical expenses and recreation.

Therefore, unless they are paying for more than half of everything they are not allowed to claim you as a dependent.