So. I’m working on my taxes. I made X amount of money. I paid Y amount of money for school. I am a grad student, so therefore independent. I can’t tell if it is a better idea to put Y in line 27 as part of the adjusted gross income or line 49 as part of tax and credits. (fyi, Y is ~$45 less than X… so yeah. I qualify for all of those “I’m poor” stuff.)
Anyone have any idea? I’m reading the booklets and I can’t figure it out…
I’d have to run through it, but if you made me guess, all things being equal, usually credits are better than deductions. (It’s better to pay Z dollars less in taxes than to be taxed on Z fewer dollars of income. The problem is, that “all things being equal clause” never, ever applies, there are so many exceptions and … yeah.
I have no idea how that would play out with the EIC or
anything, so…. I guess I’m saying I don’t know. 🙁
*hug*
and
The other thing to remember is that the IRS has bigger fish to fry. Unless you commit out-and-out fraud or claim something clearly false, they’ll leave you alone. They like persuing the rich people. They have more money to pay fines.
Use software
I suggest you use a tax program to try out both methods and see which is best for the bottom line. At http://www.turbotax.com you can use their web edition to fill out the tax forms and do the calculations, and don’t have to pay unless you want to print the forms.
Andrew
TurboTax
Use Turbo Tax. Easier to understand. No complicated math. Less legalese. Online filing. Direct deposit refund.
It was $10 last year, I think. Compared to the 10 hours I spent the last time I did it by hand, I’m very happy. My time is worth more than a buck an hour. 🙂