So I was stationed in Korea for a while and bought a $4000+ laptop mostly for school since I take online classes and need it for assignments. My school requires a laptop and internet access, so I figured it was a legit expense.
Can I use this for the American Opportunity Credit? I was a student for more than half the year and took over 12 credit hours. Also, does internet count for this too?
I am filing my own taxes and no one claims me. What are the chances this gets flagged? That thought alone stresses me out. Thanks in advance!
Shay said: @Weston
Not sure I follow. If your tuition (Box 1) is at least $4,000 more than your scholarships (Box 5), then you don’t need to find extra expenses.
@Weston
Okay, so based on that, you’d need to prove that your laptop was truly required. The IRS has allowed laptops before, but usually ones much cheaper than $4,000.
There’s a case where they only approved a $1,288 laptop. You might want to check these links:
Internet doesn’t count for this. But you might be able to shift some of your scholarships to non-tuition expenses like room and board, which could help your AOTC situation. The IRS has a guide on that: IRS Scholarships and Tax Credits.
What are the exact tuition and scholarship amounts on your 1098-T?
Tuition is $4,000, scholarships are $7,000.
So your $7K in scholarships covered your $4K tuition with $3K left over. That makes it tricky to claim an education credit since it doesn’t look like you actually paid anything out of pocket.
If your school requires a laptop, you can add that cost, but keep in mind that a $4K laptop might not fully qualify if a cheaper one would have worked.
Check if any of your scholarships were Pell Grants. You might be able to apply part of them to non-tuition expenses (like housing), which could let you count more tuition expenses for the credit.
Weston said: @Micah
$4K of that was Pell Grant, the other $3K was military TA. I already don’t qualify for EITC, so would shifting it help me at all?
You can try running the numbers both ways to see what works best.
If you count $4K of Pell Grant as income, that lets you claim more tuition expenses for the credit. You’d pay taxes on the $4K, but the education credit would offset it.
This is how it would look:
Tuition: +$3K
Scholarships: -$7K
Pell Grant claimed as income: +$4K
Required materials: +$?? (depends on what qualifies)
If you’re in a low tax bracket, paying taxes on the Pell Grant might not hurt much, and you could still get a bigger refund through AOTC. Worth running both scenarios before filing.
@Parker
I’m not trying to pull anything shady, it’s just that when I put in all my expenses—including required and non-required ones—my refund jumps by $2K. I just wanted to check if that’s actually correct.
@Parker
I did need a powerful laptop for my schoolwork, but yeah, I also bought it to last since I plan to use it for my career later. I just wanted to make sure I’m doing things the right way. If I can claim AOTC, I don’t want to miss out on it.
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