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Can my dad claim taxes on my tuition if I am the one taking the loans out?

Andrew R - 2008-04-05 12:04:44 - United States

I am a college student, still claimed as a dependent by my dad. Can he claim tuition fees on his taxes if I am the one paying for the loans? I have a part time job as a waiter. I don't live with my parents. I pay for my gas, rent, food, everything else. He pays for the interest on the loans, but I am the one who is going to pay them as soon as I graduate, in May.

Best Answer:

I don't believe so, unless he's giving you the money to pay for the loans. It's pretty straightforward, you can only claim deductions or credits for qualifying expenses on things you actually pay... Did you have any income? You could claim them on your own tax return. That is, assuming you're already paying on them. If you're just taking out the loans, and not paying yet, no one can claim them.

Answers:

Sort of. If he can LEGITIMATELY claim you as a dependent, the education credit works on the money both of you spend. However, if you get a loan and you are the one legally required to pay it back, then this is support you provided to yourself. If you provide more than half of your total support, he CAN'T claim you. Fill out the support test worksheet in publication 501.

I don't believe so, unless he's giving you the money to pay for the loans. It's pretty straightforward, you can only claim deductions or credits for qualifying expenses on things you actually pay... Did you have any income? You could claim them on your own tax return. That is, assuming you're already paying on them. If you're just taking out the loans, and not paying yet, no one can claim them.

What else do you pay? Do you live with him? Food, gas, other bills? Even if you are just paying the loan, do you pay him for those other expenses, besides it also depends, are you working if youre not making much you wont be able to use those tuition and fees because of your income, and if he claims you as a depen- dent he has a right to claim those expenses, but if you have withholdings Federal Income witheld, you can get that money, just file, but remember tell your tax preparer that youve already been claimed and that you only want your withholdings.

There is a real question whether your dad should be claiming you. If you are able to claim yourself, then you get the education tax credit (or adjustment to income called Tuition and Fees Deduction). For 2008 you should be sure your dad does not plan on claiming you so you don't have this same situation. Since you graduate mid-year, you should certainly be able to show you provided more than half of your own support.

If you're paying for everything, you don't need dependent status for something like health insurance, and your dad hasn't already filed his taxes you might be better off not being claimed as a dependent. If the tax deduction you would get for not being someone else's dependent (i.e. being able to claim yourself) is more money than what your dad pays for for you in a year then it's time to stop being a dependent. Talk to your dad about it and if he's already filed his taxes, do it starting next tax cycle. However, while you are legally filed as his dependent your father can file for any deductible expenses that you or he actually spent last year, so tuition and any payments on your student loans count, regardless of which of you pays them, but the balance of your loans doesn't.