Timing of Tuition & Fees Deduction for 2006/2007 ?


C

coldje

In Pub 970 it says that you can deduct Tuition & Fees paid
in 2006 for an academic semester beginning the first three
months of 2007. That's good, but do I have the option of
counting tuition paid in 2006 for an academic semester
beginning in 2007 *for* the 2007 tax year?

I'm kind of stuck because if I had not paid tuition in 2006,
I would have lost my 2007 classes. Logistically I could not
wait until 2007 to pay tuition for 2007. For 2006, I will
be way over the $4,000 limit. I believe the university will
send me a 1098-T for everything paid in 2006 even if part of
it was for education to start in 2007.
 
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P

Phil Marti

coldje said:
In Pub 970 it says that you can deduct Tuition & Fees paid
in 2006 for an academic semester beginning the first three
months of 2007. That's good, but do I have the option of
counting tuition paid in 2006 for an academic semester
beginning in 2007 *for* the 2007 tax year?
No.

Be sure to check out the education credits described in Pub
970. Other than calculating Federal and state total tax
both ways, you don't know whether the deduction or the
credit is better for you.
 
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H

Herb Smith

coldje said:
In Pub 970 it says that you can deduct Tuition & Fees paid
in 2006 for an academic semester beginning the first three
months of 2007. That's good, but do I have the option of
counting tuition paid in 2006 for an academic semester
beginning in 2007 *for* the 2007 tax year?

I'm kind of stuck because if I had not paid tuition in 2006,
I would have lost my 2007 classes. Logistically I could not
wait until 2007 to pay tuition for 2007. For 2006, I will
be way over the $4,000 limit. I believe the university will
send me a 1098-T for everything paid in 2006 even if part of
it was for education to start in 2007.
If it is paid in 2006, then you deduct it in 2006. If paid
in 2007, it is deductible in 2007. Basic rule for cash-basis
taxpayer.
 
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A

Arthur Kamlet

coldje said:
In Pub 970 it says that you can deduct Tuition & Fees paid
in 2006 for an academic semester beginning the first three
months of 2007. That's good, but do I have the option of
counting tuition paid in 2006 for an academic semester
beginning in 2007 *for* the 2007 tax year?

I'm kind of stuck because if I had not paid tuition in 2006,
I would have lost my 2007 classes. Logistically I could not
wait until 2007 to pay tuition for 2007. For 2006, I will
be way over the $4,000 limit. I believe the university will
send me a 1098-T for everything paid in 2006 even if part of
it was for education to start in 2007.
No choice. You paid it in 2006, your deduction, if any, is
for 2006.
 
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A

A.G. Kalman

coldje said:
In Pub 970 it says that you can deduct Tuition & Fees paid
in 2006 for an academic semester beginning the first three
months of 2007. That's good, but do I have the option of
counting tuition paid in 2006 for an academic semester
beginning in 2007 *for* the 2007 tax year?
No. You may only take a deduction in the tax year in which
you actually make the payment. If you paid more than the
maximum allowable deduction, the excess is not deductible.
Are you eligible (MAGI not too high) for the Lifetime
Learning Credit or possibly the Hope Scholarship Credit? If
yes, see if the credit provides a better answer.
 
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B

Bob Sandler

In Pub 970 it says that you can deduct Tuition & Fees paid
in 2006 for an academic semester beginning the first three
months of 2007. That's good, but do I have the option of
counting tuition paid in 2006 for an academic semester
beginning in 2007 *for* the 2007 tax year?
No. As a cash-basis taxpayer, you can only take the
deduction in the year that you actually paid the expense.

Bob Sandler
 
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