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William Perez

Prepay College Tuition for Next Year (Year-End Tax Tips)

By December 30, 2008

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Tuition paid this year for courses beginning in the first three months of next year will qualify to be deductible this year. This applies to the tuition and fees deduction, and the Hope and the Lifetime Learning tax credits.

The IRS explains in Publication 970 that the deduction or tax credit "is based on qualified education expenses you pay for yourself, your spouse, or a dependent for whom you claim an exemption on your tax return. Generally, the credit is allowed for qualified education expenses paid in 2007 for an academic period beginning in 2007 or in the first 3 months of 2008." The same rules apply for expenses paid in 2008.

December 30, 2008 at 3:38 pm
(1) Phil says:

My college is closed for the holidays. Can I still claim a credit for a payment postmarked 2008 even though the college won’t process it until 2009 or does it depend on what’s on the 1098-T?

December 30, 2008 at 4:05 pm
(2) taxes says:

That’s a good question! As long as you can prove that you paid the expense this year, the deduction should be allowed. But, as you point out, the IRS typically relies on the 1098-T document to substantiate how much was paid during the year.

December 30, 2008 at 10:10 pm
(3) Ron says:

Regarding your comment re the 1098T, it has been my experience as a Tax Pro that MOST univesities fill in Box 2 (amount BILLED in a year) and NOT Box 1, Amount PAID in a year.

Therefore if your school uses Box 2, you should be OK with your numbers.

May 21, 2009 at 12:02 pm
(4) Alex says:

If I pay in 2007 (say on Dec 30 of 2007) for an academic period beginning in 2008, can I include this amount into the deduction on my 2008 return?

June 15, 2009 at 6:08 pm
(5) taxes says:

Yes, Alex, you can take this as a deduction on your 2008 return. You might be able to take this as a deduction on your 2007 return instead. Figure out which will produce the best refund.

August 7, 2009 at 2:27 pm
(6) Jake says:

What if you paid your 2008 tuition late, in 2009. Can you claim this your 2009 return or since the tuition was due in 2008 it can only be on the 2008 return.

January 21, 2010 at 10:50 am
(7) Alex says:

I paid a lot of tuition and fees in 2009 and the ceiling is only 10K to claim lifetime credit. In my case, I paid 10K on December 30, 2009 for spring 2010 semester. My 1098T box 2 shows 30K, my question is can I claim this on my 2010 return since it relates strictly to 2010 spring semester and report the rest on my 2009 return? Publication 970 is useless in my case.

February 4, 2010 at 4:40 pm
(8) Jack says:

Pub 970 only describes someone who prepays the tuition in say 2009 for 2010 tuition and being allowed to deduct it on the 2009 tax year. My client did that and wants to take the credit on her 2009 return for a payment in Dec 30, 2008 and that payment is on the 2008 # 1099-T. The current # 1099-T shows $0 for payments or billed so I’m concerned about taking the credit

February 23, 2010 at 9:57 am
(9) DeeAnna says:

Please answer Alex and Jack’s questions! I have the same questions!

December 28, 2012 at 12:06 am
(10) Jason says:

I paid my tuition in Dec this year for the next Spring semester, can I deduct my tuition on my next year tax return?

February 5, 2013 at 7:27 pm
(11) Jane says:

Yes! I’ve been searching and spent an hour in the phone with IRS today and still I’m not sure, if I paid 2013 tuition in 2012 can I use in on my 2013 taxes? The college said it would be included on the 2013 1098.

Thank you!!

April 30, 2013 at 8:15 am
(12) Ananymous says:

We are cash-basis taxpayers. You only get the credit for when the payment happened. If you overpaid in December, unfortunately you may not include this in the following year.

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