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April 10, 2025
Question

Education credits, or a death spiral of taxes...

  • April 10, 2025
  • 1 reply
  • 0 views

So, we took a large IRA disbursement (inherited) to pay for the college expenses of two kids at an expensive private college. According to what I've read, the disbursement alone put us over the income threshold for the education credit. I was unemployed in 2024, so there wasn't any income, did I do this wrong?

1 reply

April 11, 2025

No, you didn't do anything wrong. Your adjusted gross income is used to determine the income limit, and the taxable portion of your IRA distribution is included in that.

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