Tax Question: Would I be considered a fifth-year senior?

It sounds to me like you are eligible. You didn’t complete your four year degree before Jan 1, 2013, and you took more than a half load of credits during the 2013 school year. Do I have that right? I’m not an accountant, but that is my intepretation. In what you provided I don’t see any rule saying you can only take the deduction for four years. You can always call the IRS and ask. I am not familiar with that tax law at all, I am just telling you with what you provided here how I understand it.

To me completed four years is getting a four year degree, not four calendar years. But, I might be misunderstanding the intention of the sentence. You can easily look back at your old taxes and see if you took the deduction. You have copies right? Tax returns are usually not very large for most people and easy to look through.

@JLeslie Yes, I was a full time student throughout Spring and Fall of 2013 and I didn’t complete my degree until December of 2013. I’m getting my taxes filed tonight, so I’ll find out soon enough, but I wanted to get some input before I went in – just in case I needed to do some research first. We’ll get double the refund if I’m eligible for this credit, so I really hope I can get it. Even if I get it, our refund this year is going to be nearly $2000 less than it was last year. Everything is basically the same, so I don’t get why that would be. So much for paying off those credit cards.

@livelaughlove21 I have no idea if the tax tables have changed this year, so I am not sure why your refund would be much different. Maybe you just figured it wrong and will be pleasantly surprised. Have you made the same amount of money and paid the same amount in already? I thought you were out of work for a while?

Ask the accountant directly about the school credit question and make sure you feel comfortable the person knows what they are talking about. I have had accountants make mistakes twice that I caught. One wound up costing me about $700 and there was no way to correct it. I partly hold myself responsible for not being more vigilent. One was a huge mistake, that I would have been able to correct, but it would have been annoying. Almost $12k I would have overpaid.

Edit: Why are you getting such large tax returns? I don’t know your income, but I don’t get the impression it is very very high. Why are you getting refunds over $2k, that is probably too high. You would be better paying less taxes so you can pay off your credit cards more easily throughout the year.

We students that foot the bill usually get decently sized refunds…

@yankeetooter I’ve never paid anything out of pocket for school because I’ve had scholarships and loans, but I’ve always gotten a nice refund because I’m a student. I don’t really deserve it, but I was hoping to be able to get it one last time before my husband and I jump the tax bracket this year (it’s bittersweet), but we shall see.

@livelaughlove21 What is bittersweet?

I don’t understand how a student can get a deduction if they don’t pay for school? Is that how the tax code works? You don’t have to have paid for the classes?

@JLeslie Sweet because we make more money, bitter because we’ll be taxed at a higher rate.

I don’t know why or how, I just know I’ve gotten this education credit for the past few years.

@livelaughlove21 You do realize only the money made in the higher tax braket is taxed at the higher rate. All the money you make below that bracket is still taxed at the lower rate. You should never be bumbed about making more money regarding taxation. The only time it comes into play is when a spouse who does not make much money and the other spouse makes significantly more is deciding whether it is worth it for the lesser paid spouse to bother to work, or better time spent taking care of the household or babies, or other things she or he might be interested in. A lot of people think the higher tax bracket means all their money is taxed higher and that is incorrect and politicians like you to keep thinking it, especially the Republicans.

@JLeslie Good to know. This is the first time we’ve made enough money to have to worry about such things.

UPDATE: I was right, you can only get the AOC for four years. Our tax guy had no way of finding that out tonight so we filed on the assumption that I’d already gotten the credit for four years. I got another, lesser credit instead.

I also found out that we got so much less back this year because Josh got a lot of overtime last year and they taxed the hell out of that overtime.

Oh well, at least we’re getting a refund.

@livelaughlove21 Don’t you have a copy of your tax returns from the last five years? Can you get the lesser credit you spoke of and the school credit if you are eligible for the school credit?

Why do you think you are at the borderline of a tax bracket change? I doubt you even know what percentage taxes you are paying on your income, just like most Americans don’t. I could easily be wrong. You just did your taxes do you have any idea what percentage of your earned income, gross unadjusted income, went to taxes? You don’t have to answer, but I urge you to look at things like that if you have political opinions on taxation so you know the real numbers and not the scary numbers people throw out like 50% of their money goes to taxes. That is never true in America for federal income tax. If you add all taxes up, fed, state, social security, and in addition property etc, then sometimes the number can start getting high.

@JLeslie I was 19 five years ago – no, I didn’t keep track of my returns. I have the last three years, but it’s the fourth that’s in question. I tried to get my tax transcript from the IRS, but I just got an error message. I’m not too concerned about it at this point.

My opinion about taxes has nothing to do with politics. I don’t give a single shit about politics. I got that information here. Forbes has a more detailed one. Last year we made $43,000. This year it’ll be closer to $75,000.

It’s not like I’m sitting here cursing Obama for making us pay taxes. Far from it. I just know that Josh makes $19.20/hr, works 40 hours a week, brings home $550/week, and would owe the IRS $700 if he was filing single. That sort of sucks, but the reason why really doesn’t matter. It is what is it – gotta pay taxes. No big deal.

@livelaughlove21 I wasn’t thinking you are cursing Obama or anything like that. You will not be in the next tax bracket next year with your numbers, because you are talking about the actual income you will earn, and the brackets are on adjusted income. Anyway, like I said, even if you go by the table you linked and ignore whether it is adjusted income or not, it’s just the few thousand over the bracket that is taxed at the higher rate.

I should not have brought politics into it. I just get frustrated when Republicans talk BS numbers about taxes. I don’t think that you were or are doing that. I think you just want to get your taxes filed and take advantage of whatever tax laws might help you.

Back in the day we always kept our tax returns 7 years. I know now the advice is more like 4, unless a person knows they have underreported income for some reason, but I still keep mine 7. I have had to refer back to an old tax return more than once. Usually not years back’ but I used my tax return to figure out whether to pay off my mortgage, and to answer other questions. Now that your returns are getting more complicated, and since you don’t do the taxes yourself (I don’t anymore either) it can be useful to hold onto the paper copy for several years.

@JLeslie “the brackets are on adjusted income”

Once again, good to know. Be assured that any misconceptions I have about taxes are not based on my political views, but a result of run-of-the-mill ignorance and inexperience. Like I said, I’ve never made enough money to worry about it. Thanks for setting me straight.

I know now to keep my returns. At 19, I did not know how important that was.