bursar-l: 1098s and Tuition Locking Payments

Western New England College has the plan whereby parents can pay for
future years and lock in the tuition rate. I'm trying to clarify the
implications for claiming the Hope and Lifetime credits. We always tell
parents to talk to tax advisors, but I'd like to have a clear idea of
the issues anyhow. Here's what I think:

1. If you're MAGI is over the $55,000 (single) or $110,000 (joint),
then you can't file for the tax credits, go ahead and lock in the tuition.

2. With the large first year payment, they can choose the Hope or
Lifetime in the first year.

3. Tax credits taken in future years are totally dependent on levels of
scholarships and other borrowings or payments. The initial lump payment
is just NOT attributable to any future years.

That's my simple start. There are a lot of complexities, but those I
will leave to an advisor.

Any thoughts on this view?

Stuart Warner

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Received on Tue Mar 20 11:21:02 2007