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Hi,
I am 3L looking to save on taxes for 2014.

I have enjoyed getting the $2,000 Lifetime Learning Tax Credit each year for paying insane amounts of tuition.

But for my 3L year, the tuition for the spring semester was due and my student loan was applied in late December of 2013. This means that I will not get a 1098-T from my school for 2014.

Since I (like all of you with federal loans) am able to make a "refund payment" within 120 days of disbursement which will cancel all interest and fees, and basically undo the loan, I am wondering if this would count as "paying tuition" in 2014.

Or does this count as just paying off a loan (and thus ineligible for the tax credit)?

Oh and fyi, the refund payment would go to my school and not my loan servicer.

I suppose a case could be made either way, but I am curious as to what other people think.

Thanks!

Assuming you pay off student loan interest, that usually a useful deduction.

I'm not sure about the other part. I'm pretty sure you can apply the tuition payment to your return even without a 1098-T, and if audited just explain that the payment was for the Spring 2014 semester.

Yeah the tuition interest deduction is a nice one too. And I think you're right about the 1098-T- it doesn't seem to be required. Thanks for your thoughts!

Since I (like all of you with federal loans) am able to make a "refund payment" within 120 days of disbursement which will cancel all interest and fees, and basically undo the loan, I am wondering if this would count as "paying tuition" in 2014.

Uh, not quite.

Think about it: if you refund the loan, i.e., send it back to the feds, you will then have a balance due for unpaid tuition/fees. You will have to cut a check for that unpaid balance, and that would count for paying tuition in 2014.

(Actually, the Uni probably won't let you send the loan back until after you send them the equivalent Benajamins, such that after they return the loan, you will have a zero balance with them.)