Can this tax liability be correct?

I know, you are not a tax attorney, etc. Apparently part 2 of an earlier thread I started.

Used TurboTax online to get a ballpark figure of what the illustrious girlfriend would owe in taxes considering she never had any taken out of unemployment.

It looked like she would owe about $1500 on unemployment of about $25K with no other income (dammit!). Oh wait, whats this button here? “Tuition”? Well she did go back to school to work on her bachelors this year. About $4500 in tuition for 2009.

Taxes owed = $0 :eek:

Everything I’ve read said that with the tax credit for people finishing their BA/BS that this is absolutely correct but this is from an agency that taxed me for a foreclosure on $40,000 so I ended up with no property (so net income = $0) AND I had to pay on top of that? They’ll tax you $3 if you find a dollar bill.

Add that to the fact that her luck this last year (13 months and still no job, Chapter 7) just ain’t that good that she would have no tax liability. What’s the catch? Can someone going back to school really owe no taxes for 2009 if their income is $25K?

I’m confused, since when is tuition tax deductible?

I don’t know the details of it, but there was a tuition tax credit of up to $2500 as part of the economic stimulus package.

Found some info here.

ETA: Judging by that article, it would account for a $1500 tax liability going to $0.

Like pulykamell showed, its part of Obama’s stimulus plan.

Gee, I guess all those ads were right. Obama does want moms to go back to school.

I know this isn’t the main point of the thread but just because you were foreclosed, have no property, it doesn’t mean your net income on the transaction was $0. I’ve not been through it so I don’t know the details but thisgives you an overview.

Also, as much as I dislike the IRS, they don’t tax you. Congress taxes you. The IRS just collects the money.

Those numbers sound about right to me. Too bad she doesn’t have any earned income for the year - there are all kinds of credits this year that might actually get her a refund despite having no tax withheld.