"Prepaid" Education Expenses

[penguintroopers]

Could someone make sure I understand this correctly? I'm trying for the Lifetime Learners Credit.

MAGI is under the max for MFJ, so we don't have to worry about the phase-out.

Backstory: graduate student August 2016-May 2018

1098T's issued

2016: Fall semester of 2016 - $15000
2017: Spring semesters of 2017 AND 2018, Fall semester of 2017 - $45000
2018: No 1098T issued, but in 2018 I actually paid $15000 of the $45000 that was stated in my 2017 1098T

From the instructions on form 8863....

Prepaid Expenses
Qualified education expenses paid in 2017 for an academic period that begins in the first 3 months of 2018 can be used in figuring an education credit for 2017 only. See Academic period, earlier. For example, if you pay $2,000 in December 2017 for qualified tuition for the 2018 winter quarter that begins in January 2018, you can use that $2,000 in figuring an education credit for 2017 only (if you meet all the other requirements).

(Caution)
You cannot use any amount you paid in 2016 or 2018 to figure the qualified education expenses you use to figure your 2017 education credit(s).

So from what I gather, I could say that I had $15000 of qualified expenses in 2018, even though I don't have a 1098T issued from the school for 2018? The only thing I have to back up is bills from the school stating I paid the money in 2018. The weird thing is that I don't really consider the money "pre-paid"... it was paid in the semester of the first part of the year?

Any help here would be greatly appreciated, thanks.

[secondcor521]

I believe you are correct, with the proviso that you did not deduct the $15K that you paid in 2018 but the school included on your 2017 1098T.

In other words, if you included $45K in expenses on your 2017 Form 8863, then No.  If you included $30K in expenses on your 2017 Form 8863, then Yes.

As an aside, if you and/or your parents have not used up the 4 years of AOTC (American Opportunity Tax Credit), that may lower your tax bill more than the LLC.

[penguintroopers]

I believe you are correct, with the proviso that you did not deduct the $15K that you paid in 2018 but the school included on your 2017 1098T.

In other words, if you included $45K in expenses on your 2017 Form 8863, then No.  If you included $30K in expenses on your 2017 Form 8863, then Yes.

As an aside, if you and/or your parents have not used up the 4 years of AOTC (American Opportunity Tax Credit), that may lower your tax bill more than the LLC.

I actually have to file an amended return for 2017 right now to claim the LLC for last year as I thought I was ineligible and turned out I was (and we found out while doing 2018). So thankfully I can claim $30k in 2017 and $15k in 2018 while filling them both out.

99% sure my AOTC was used up during my 4 years of undergrad, but thank you :)