<p>I have been messing around with TurboTax (I used TaxCut last year and like it better). I have experimented with putting some rough figures into the questions pertaining to college expenses, and I’m getting a low figure back for my Amer. Opp. credit. Was I mistaken in understanding that the first $2000 was fully refundable?</p>
<p>When I enter my numbers (well in excess of $2000 x 2 kids in qualified expenses) TurboTax is giving me an Amer. Opp. Credit of around $1750 for both kids combined.</p>
<p>Wow. I did way better last year with the Hope Credit.</p>
<p>If your income qualifies, you should be getting the 1st $2,000 for each child and then $500 for the next $2,000 in expenses for each child. Try one of the other free estimators online and see what you get.</p>
<p>I did Tax Cut for years and Turbo Tax last year - it was terrible and I will not use it again. It didn’t even trigger the kiddie tax forms for my kids and I file late due to living overseas so all corrections should have been made in the program…</p>
<p>I need to try this out with TaxAct. I have it installed and am waiting for tax forms but I can certainly plug in the tuition stuff (have plenty of bills for two kids). I gave up on Turbo Tax many years ago. Quicken too. Too many bugs in Quicken and I didn’t like the DRM stuff that they tried to do in TurboTax. I ordered it, found out about the DRM and never bought their stuff after that even though they changed their policy on DRM the following year.</p>
<p>TaxAct gives me the roughly $1750 for each child and says that I’m not eligible for the American Opportunity Tax Credit. Don’t know if the software is incorrect or if my income is the issue. At any rate, the roughly $3,500 in credits is nice.</p>
<p>I still need to enter a lot of income data so I suppose that this credit might go away. I should look into the details of the income limitations for this credit.</p>
<p>After some more playing around, it appears that one student generated the $2,500 tax credit and the second generated a $1,000 tax credit. Is this the way it is supposed to work?</p>
<p>From my understanding if your AGI is under 80K (single), 120K (married) you’re eligible for the full credit. The first $2000 spent on eligible expenses (tuition, fees, books) is fully refundable. After that it’s on a scale, but caps at $2500.</p>
<p>The only reason I can think of where one student would be generating the lower tax credit is if you spent only $1000 in eligible expenses on that student.</p>
<p>I read that the limits were raised substantially to 80K and 180K. I just put in $4K for the tuition amount for the second child. I’m pretty sure that the actual costs were more but I don’t have the actual forms yet. Maybe it works out when I enter the real information or maybe there’s something funny about the taxation of the second child. I guess that I’ll google around for more.</p>
<p>The problem was that I was putting the amount in Line 1 and Line 2. I looked at the 2008 1098-T forms (don’t have 2009 yet) and saw that Line 1 was blank.</p>
<p>TaxAct told me that it appears that we don’t qualify for the AOC - I gather that because I checked that she isn’t in a degree program. She’s a dual-enrollment student. It gave me the credit amount $2,500 anyways which I thought was odd. Then I read the description and it said that a primary or secondary student qualifies as being in a degree program. She does technically fit in that category as she is a secondary student with college expenses.</p>
<p>The IRS page above says that it is good for the first four years of post-secondary education. I clicked on the link to the instructions to the form and it brought up the 2008 edition. It appears that the 2009 instructions haven’t been published yet. I had a look at the 2008 instructions and it appears that dual-enrollment expenses do qualify so, at the moment, it appears that we can claim the whole $5k.</p>
<p>In years past, I think that we claimed the deduction which was worth far less because we hit the income limits.</p>
<p>If your daughter’s a dual enrollment student, you might want to consider whether taking the credit this year is to your best advantage, since it is good for only the four tax years. </p>
<p>At the moment this is true. But that could be changed in the future and there are the other deduction and credit which could get their income maximums raised.</p>
<p>I notice a glich in Turbotax when I started with estimates. I put in what I thought the 1099t and other items would be and at first it said I was not eligible. After putting in other info and IRA etc, I finally say the credit pop in there. That was just to do the FAFSA preliminary. By the time I put in all the actual from all real documents I had the credit posting and yes most of it was refundable. It was a very bad year in my local economic pocketbook so I really welcomed the new limits. Turbo tax does not check for errors and from what I can see does poor job in diagnostics.</p>
<p>I have used Turbo Tax for years & have been happy. However, I am not sure about how well it’s handling the education tax credit options … I plan to figure out manually & see if the option they chose really is best. Sigh … that sort of defeats the purpose of paying for the software.</p>
<p>I am also having problems with Turbotax and these credits. I have 2 students and only one is allowed the credit. Not sure why, and it wasn’t a full credit. Is it a glitch in the software? Can I manually override? How do I do that? HELP!</p>