Note: My answers address only federal tax issues; I know
nothing about taxes in your state.

- quote -

You cannot claim the difference this year. You could amend
last year's return to correct it, but I doubt it would be
worth it: What's your tax on $104? About $15 maybe?

- quote -

If your program leads to a degree—and it does, doesn't
it?—you can claim the Lifetime Learning Credit. Qualifying
expenses are only tuition and required fees—no books,
equipment, etc, unless you were required by the institution
to purchase them from the institution and did so. Amounts
paid with loans are treated the same as if you paid them
out-of-pocket.

- quote -

The reason you can't claim the Hope Credit is that you
aren't a first- or second-year undergrad. It has nothing to
do with whether you had an income last year.

- quote -

Instead of the Lifetime Learning Credit, you have the option
of taking the Tuition and Fees Deduction on page 1 of form
1040. Again, only tuition and required fees are eligible.
Do whichever one benefits you the most; it depends mostly on
the amount of your eligible expenses and your tax bracket.
I imagine that Turbotax has some sort of education expense
calculator that figures out which one you should use.

You can deduct whatever student loan interest you paid in
2003.

I don't think you can deduct the application fee, and I know
you can't deduct the medical fee as an educational expense
(even if it was required); it can only be deducted as a
medical expense on schedule A.

You should be able to handle this by yourself with Turbotax,
though I strongly recommend going to www.irs.gov and
downloading IRS Publication 970 (tax benefits for
education).

<< -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << ------------------------------------------------->

pauljd70[at]hotmail.com says...

- quote -

Since you appear to have checked into the various education
credits, I'm not going to address that part of your post.

Anything you paid in 2002 is not deductible in 2003.

Your tuition, books, fees, etc. are not deductible.

My best suggestion is that you have a tax pro handle things
for you. After all, would you want a tax pro to perform
surgery?

Gary

--
You can probably X figure out X which letters to X delete to
derive my email address X.

<< -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << ------------------------------------------------->

hi I hope someone can help me with a few questions I have as
I am confused.

I am a medical student in California, I enrolled last year
(2003) full time, but for 2002 and the first part of the
year (2003) I was working full time, and paying tax. I have
been living in California for 2 years (since Jan 2002).

Previous years I was at University in another state, and
completed my tax forms correctly in that state. I have a
loan from that period which I took out in that state,
(small), which I have deferred now, but did pay into while I
was working. I have accrued interest on that first loan
over time.

Last year (2003) I obtained a second loan: a Federal
Stafford Loan which comprises of an unsubsidized loan and a
subsidized loan. I am accruing interest on the unsubsidized
part of the loan.

I have used the loans purely for tuition fees and books etc.
I dont live on campus and I don't pay rent or living
expences, these are covered by my partner.

Here are my questions:

1. Last year I did my own taxes for the year (2002) as they
were straight forward (I used Turbo Tax). At that time I
itemized my deductions and claimed tax on the interest on
the first loan. Looking back I have realized that I
accidentally entered the wrong figure ($24), and the tax
summary for 2002 I got was actually for $128. Is it worth
claiming the difference in this years tax claim (for 2003),
and if so how do you actually go about doing that as I don't
see anything in the tax form or Turbo tax that would allow
me to do that and state that its a claim for a discrepancy
in last years tax claim.

Now onto this years tax (2003)

2. I have accrued several bills while attending Med school
from August 2003. I have kept all the receipts for books
and medical equipment etc that I have had to purchase and I
have them sorted out and itemized. I also have the annual
interest statements from the first loan for interest accrued
over 2003 and the interest summary for the second loan (fed.
Stafford loan) I took out, for 2003.

what can I claim?

As far as I understand, I cant claim lifetime continuing
education credit as I am not attending Med school to
increase my job skills etc. I don't believe I can claim the
Hope credit either as I had an income last year which was
declared, and I think that there are some other conditions
that preclude me from claiming this as well.

I think I can claim Educational expense deductions. Here is
where I am confused. I think I can claim all applicable
expenses that I incurred purchasing items for Med School, I
can claim the interest for the Stafford loan and the first
loan (sum of the two), and I believe that I can claim the
tuition fees paid for 2003 semester, and any fees associated
with the health care payment. I understand that I cannot
claim for things like extra curricula clubs etc. Also the
original application fee for the med school I am attending
can be claimed. is that correct? What bit of tuition fee?
All of it?

3. One final question, I was reading about something to do
with the California portion of the interest on loans. what
is this about and is that something I have to calculate?
Does this apply only to the interest accrued on the second
loan taken out while I have been a resident of California,
or both loans? does it also apply to the tuition fees etc.

Any help in answering these questions would be really
helpful, and very appreciated.

Thanks

Belma

<< -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << ------------------------------------------------->