I'm trying to figure out when to pay my last installment of grad school tuition and have the option of paying this tax year or in early January of next year. I'm trying to qualify for the highest tax credit, which I believe will be the lifetime learning tax credit ($2,000).
Some details:
2016 income: $70,000
2016 deductions (HSA, 401K maxed out, Insurance): $20,200
2016 AGI (I think) is $70,000 - $20,200 = $49,800
To calculate my MAGI, I think I need to add back taxable capital gains ($900) and realized long-term gains ($5,300)
This would give me a MAGI of $49,800 + $900 + $5,300 = $56,000
Knowing that I'm rounding on all of these numbers, it looks like I'm just in the phase out bracket of the lifetime learning tax credit (link:
https://www.irs.gov/credits-deductions/individuals/llc)
I've incurred $48,750 in grad school expenses this year and need to pay another $30,200 either this tax year or next tax year.
I could also contribute to an IRA this year (I would need to pull $5,500 out of a taxable account to do so)
I'll be graduating in May 2018 and will be making a fairly high income in 2018 (~$100,000)
Given all this detail, any advice on the below points would be amazing and much appreciated!
1) Whether to pay remaining tuition due this year or next January
2) Any other deductions that may be of higher value for graduate school, or ways to reduce my taxable income
3) Whether or not I should pull out money from a taxable investment account to fully fund my IRA
I know there's a lot in this post. I was trying to get all the relevant details together, thanks for reading and any advice!
