[ilovepiano]

Hi guys,
Reading some of the postings I realize I should have reported the interest on my foreign savings account on my 2005 and 2006 tax return (I am an F-1 student filing as resident alien since 2005). I checked the figures and because of this neglect I received about $8 too much of a refund for both years. Is there a penalty for this when I file an amended return? I also did not claim the lifetime education credit for which I am apparently eligible both years when I filed.
Thank you!

[AtlantaTaxExpert]

If the interest was the ONLY issue, I would advise you not to bother amending the return. The IRS would not bother for such a small amount of money.

However, claiming the Lifetime Learning Credit WILL result in a significant tax refund, so you should amend the 2005 and 2006 return to claim that credit. When you do so, you can then add the interest income to the amendments.

[Queli]

I would like, know about tax refund for j1 visas.

[ilovepiano]

Thank you! If I refile to claim the tax credit, how do I treat reimursements I received the following year? Say if in 2005 I paid x amount for tuition and fees and then in 2006 I got reimbursed some of that amount? Do I just not claim that amount on the 2005 tax return?

[AtlantaTaxExpert]

LovePiano:

It depends on the level of reimbursement.

There is a limit as to how much in education credits you can claim. Example: Lifetime Learning Credit is capped at $2,000, which is 20% of $10,000 in tuition. If your tution was $30,000, and you then got reimbursed for $5,000 in the following year, it would have NO EFFECT on your Lifetime Learning Credit.