I have been reimburseing my grandson for college tuition payments that he has previously paid by credit card. He is not my dependent. The reimbursements are made from my IRA withdrawals. Do I have any prayer of recouping any of the expenses as Income Tax deductions? If I changed the form, ie paid tuition direct to the university, would it change a negative answer? Thanks for a very informative newsgroup.
Whether you reimburse him for the expenses or pay them directly to the school, they are still nondeductible GIFTS. However, direct payments to the educational institution are NOT subject to the $12,000 per year gift limit and do not have to be reported on a 709 Gift Tax return.
A gift of education should be its own reward.
OP could also potentially use the vehicle of a 529 to indirectly make the payments and perhaps gain some tax advantage, depending on the state (and age of the grandson, perhaps? I don't recall all the rules ottomh).
Would be against _state_ tax if applicable, however, not federal.
Herb: Thanks for the prompt answer, I agree that virtue should be its own reward but it is much sweeter if deductable. Cheers, Leo./
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