[talligator2001]

Hi,
I was student on F1 visa since Aug 2001 to Dec 2003. In Jan 2004 I got a job, I was on OPT till Oct 2004. On Oct 1st I got my H1B visa approved.
Now during my years as a student, I paid fees for my 1st semester i.e Aug 2001 to Dec 2001) and my last semester( Aug 2003 to Dec 2003) which was a total of 15000$.
Now my wife is doing her studies, and till now I have paid 6000$ for her fees and books.
This year we will be filing 1040 form under married filing jointly. Now can I take any education credits for the fees that I have paid while doing my Masters studies ? If so how does it work out. From what I read on IRS website, it says that I can take lifetime learning credit for any number of years, so what does that mean ?
Can I take whatever expenses I have paid till date for my Masters studies under lifetime credit and my wife's expenses under tuition and fees deduction ?
Or can I take both of our expenses under education credit.
Or can you suggest any other way
Thanks
talligator2001

[AtlantaTaxExpert]

Talligator2001:

Since you are filing jointly with your spouse as a resident alien using Form 1040, you are eligible for claiming the Education Credit which was not available to you as a non-resident alien.

You can claim the credit on the 2005 return only for expenses incurred during calendar year 2005. Hence, your 2001 and 2003 tuition payments cannot be claimed.

The credit takes three forms:

1) As a adjustment (deduction) to your income.

2) As a HOPE credit (available only for the first two years of college education).

3) As a Lifetime Learning Credit (available every year for any level of higher education).

If you use tax software when you prepare your return, the Interview method will ask you a series of questions about your wife's education and, based on your answers, apply the credit that is legally the most advantageous to you. If you use a tax professional, he/she will also make sure the most advantageous method is used.

[talligator2001]

So there is no way I can get deductions or credits for the fees I paid during my Masters?

talligator2001

[AtlantaTaxExpert]

Talligator2001:

I did not say that there was no way you could claim the deduction. I merely stated that you could not claim deductions in 2005 for expenses incurred in 2001 and 2003.

It's absolutely too late to claim the 2001 expenses. The three-year statutory limit for amending returns has passed for 2001.

If you filed a tax return for 2003 and in fact paid income taxes, you may be able to amend that return to claim your 2003 tuition payments. If you filed as a non-resident alien for 2003, you would have to determine if you had the option to file as a resident alien for that year. If so, you can amend the return using Form 1040X and opt to file as a resident alien. Then (and only then) could you claim your 2003 tuition payments. You would also have to amend your 2004 return to convert to a resident alien status. You need to review IRS Pub 519 to determine if you had the option to file as a resident alien in 2003, as you have not provided enough information for me to make that determination.