Taxes-- I have to pay $42. really? MBA or accountant advice

[medsurg2010]

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Hoping someone can help me.

I am HPSP (third year med student) and having trouble with taxes this year.

Are we considered full time students? I am 25 y/o and if I could NOT be considered a full time student I would qualify for EIC. Technically I am enrolled in school, but I get "paid" to go to school (aka our stipend) so can we claim that we are not full time students but reservists to get the EIC?

If our stipend is taxable, why couldn't we consider it to be income and therefore qualified for EIC?

For anyone claiming Lifetime learning credit, what expenses do you claim? We can only claim fees if they are "required by the institution" to be enrolled, which HPSP pays. My school gave me a 1098 with $5 claimed on it (I have no idea what this is). I have heard of other schools that give HPSP students 1098-T's with the full tuition claimed and then HPSP students at those institutions claim the qualifying portion of tuition as Lifetime. I would think they could not do this because Navy pays to school/ reimburses the student.

I realize its $42. But really, the government already owns me... do they need my coffee money for the month? seriously.

Thanks in advance

 

[Jolie South]

I didn't think we could claim any of the tuition for any credits since we're not actually paying it. My school gave me an electronic 1098T, but I was under the impression that if you're not paying out of pocket, it doesn't count. There was an addendum on it with something to that effect.

How are you doing your taxes? Electronic program?

 

[medsurg2010]

I'm using H and R Block's free program for military from Militaryonesource.com

Any idea on the EIC issue?

Thanks for replying.

 

[Jolie South]

Here's what TaxCut says doesn't qualify for the Lifetime Learning credit, tuition deduction, or Hope credit:

The tuition was fully covered by a 529 plan, Coverdell ESA, GI bill, or a tax-exempt scholarship.

It also says that you can only apply for one of the above credits on your tax return. The software picks the most beneficial.

HPSP counts as tax exempt because it is being used only to pay tuition. You only pay tax on the stipend. In reading over the military benefits, it's hard to make a case that HPSP recipients qualify for any tax related ones.

The following disqualify you from Earned Income Credit:

Your earned income or adjusted gross income exceeds $38,646 ($41,646 if married filing a joint return). If you have fewer than 2 qualifying children, the income cut-off is lower.
You're under age 25 or over age 64 and have no qualifying child.
You're under age 25 or over age 64 and are someone else's dependent.
Your investment income exceeds $2,950.
You're married filing a separate return.
You're someone else's qualifying child.
You're claiming the foreign earned income exclusion.
Your Social Security number doesn't allow you to work.

 

[medsurg2010]

Right, so I qualify for EIC based upon my income (HPSP) because I have a child. However, I am disqualified because of "full time student" status (this is from the IRS website). If I could not be considered a "full time student" I would qualify by all other requirements. Thus, my question is:

Are we really considered full-time students or not?

Thanks for your help!

 

[Jolie South]

Right, so I qualify for EIC based upon my income (HPSP) because I have a child. However, I am disqualified because of "full time student" status (this is from the IRS website). If I could not be considered a "full time student" I would qualify by all other requirements. Thus, my question is:

Are we really considered full-time students or not?

Thanks for your help!

If you're a full time medical student, I don't know how you could get around admitting that.

 

[edmadison]

If I'm reading the IRS regulation correctly, the restriction on being a full-time student is limitted. To qualify to receive the credit, you cannot be an eligible a qualifying child of another person. One aspect of this definition is being a full time student AND under 24 (tax cut may have the age wrong). This is per IRS publication 17. The IRS has a EITC qualifier program on the website IRS.GOV. I'd give it a shot.

Ed

 

[medsurg2010]

OK, so I was on the phone with the IRS regarding the EIC this morning:

We can claim EIC even if you are a full time student, over the age of 25 at the end of 2008, and not being claimed as a dependent by anyone else. So if you're HPSP and meet the income guidelines, you can get the EIC. It does not matter if you claim Lifetime learning credits for eligible expenses and the EIC. You can claim both 😀. The program I was using automatically defaulted into not allowing both to be claimed but that is an error, as it is allowed.

This could be Uber-helpful for HPSP people with kids (the income limit for single, no kids is around 12,800--too low for hpsp). So claim it if you qualify👍

Unfortunately I am out of luck because at the end of 2008 I was 24, not 25. So much for being a Capricorn👎

Thanks for the help. Hope this helps others, too

 

[Jolie South]

OK, so I was on the phone with the IRS regarding the EIC this morning:

We can claim EIC even if you are a full time student, over the age of 25 at the end of 2008, and not being claimed as a dependent by anyone else. So if you're HPSP and meet the income guidelines, you can get the EIC. It does not matter if you claim Lifetime learning credits for eligible expenses and the EIC. You can claim both 😀. The program I was using automatically defaulted into not allowing both to be claimed but that is an error, as it is allowed.

This could be Uber-helpful for HPSP people with kids (the income limit for single, no kids is around 12,800--too low for hpsp). So claim it if you qualify👍

Unfortunately I am out of luck because at the end of 2008 I was 24, not 25. So much for being a Capricorn👎

Thanks for the help. Hope this helps others, too

I still don't qualify based on my income. 🙁