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July 10, 2020
Question

I was eligible to file form 8863 for tax year 2018. Nothing has changed in 2019 but the Turbotax does not get me to this form. How can I get to form 8863?

  • July 10, 2020
  • 1 reply
  • 0 views
My status has not changed.  I get 1099-Misc income which has a tax liability that can be offset from American Opportunity Credit.  Currently, the software calculates a tuition deduction of $800 which does not decrease the 1099-Misc tax liability.

1 reply

Hal_Al
Employee
July 10, 2020

Type> letme <in the search box. That will take you to a screen where you can elect to change the tuition deduction (TFD to the American Opportunity Credit (AOC).  If TT tells you that you're not eligible for the AOC, and you think you are; you have answered  something wrong, in the interview. But, a lot of people are just not eligible, including most students under 24.  See https://www.irs.gov/Individuals/AOTC

 

The IRS considers anything in box 7 of 1099-MISC to be self employment income.  Net self employment income is subject to  "Self employment tax" (SET), as well as income tax. SET is how you pay social security & Medicare tax, on earned income when none was withheld. SET is due even if you do not have enough income to have to pay any income tax.

 

The tuition and fees  deduction  (TFD), the Lifetime learning credit (LLC) and the non-refundable portion of the American Opportunity Credit (AOC) can not be used to reduce SET ("decrease the 1099-Misc tax liability").  But the AOC is 40% refundable and can be used to reduce SET. If TurboTax (TT) is calculating an $800  tuition deduction (TFD), that means that the refundable AOC would only be about $320.  You may want to save the AOC (you're only allowed to claim it 4 times) for a later year when it's more ($2500 max).