Using College Tax Credits Proactively

CTScoutmom
Sat, 25 Aug 2012 15:02:14 +0000

A far better strategy is to not worry so much about allocating money, but in balancing your withholding to meet your needs. If you are likely to end up with a refund, then reduce your withholding. If you’re likely to end up owing, or at break even, don’t.

Look at what you’re taxes are likely to be like in for tax year 2012. You may have claimed child tax credit for your two students, if they were under 17, but won’t once they turn 17. That’s as much as $1000 per child, unless you’re phased oud due to income on either end. If they are graduating HS in 2013, they will qualify as FT students, even if they don’t start college, so they are both likely to still be dependents.

Since you don’t know what kids of aid they will get yet, or where they will attend, you don’t know if they will have qualified expenses.