Education expense optimization (1040)

Alerts and notices
Leave feedback

Contact information (optional):

Leave this blank:

Please tell us how we can make this information more helpful.


Characters left:

MFA required for electronic filing

Effective May 3rd, the 2017 version of UltraTax CS requires multi-factor authentication (MFA) to transmit e-files from CS Connect. Find out more.

Use the following procedure to assess whether it is more advantageous for your clients with education expenses to claim the tuition and fees deduction or the education credits. The education expense optimization process produces a detailed report that shows, on a per-student basis, the amount of the tuition and fees deduction or education credit that will be reported on the tax return.

Education expense optimization allows you to:

Optimizing education expenses

The following conditions must be present to optimize education expenses.

To optimize education expenses:

  1. In Screen Educate, click the Statement dialog button attached to the Eligible student information field to open the Tuition and Fees Deduction and Education Credits statement dialog.
  2. In the Tuition and Fees Deduction and Education Credits statement dialog, enter information for all eligible students. Enter education expense optimization code (Ed Exp Code) 4 (optimize between the American Opportunity Credit and the Tuition and Fees Deduction) or 5 (optimize between the Lifetime Learning Credit and the Tuition and Fees Deduction).

    Note: The student's Social Security number can be chosen from the drop-down list in the statement dialog. Only the taxpayer's, spouse's, and their dependent's Social Security numbers will be present in the list. If the taxpayer or spouse is a dependent of another, their Social Security number will not be available for selection unless the Dependent of another but claiming education credit field is marked in Screen Educate.

  3. Click OK to save the information you entered in the Tuition and Fees Deduction and Education Credits statement dialog.
  4. Optional: You can optimize education expenses with or without state returns. State information is included by default. To exclude state returns from the optimization process, enter X in the Exclude state(s) net due/-overpayment in education expense optimization field.
  5. Click the Print or Print Preview button to print or preview the return. (For more information, see Printing tax returns.) The Education Expense Optimization report will be generated and the optimized amounts will transfer to the return.

    Notes

    • By default, the Education Expense Optimization report is automatically generated when printing or previewing a return. To change this option, choose Setup > 1040 Individual, click the Other Return Options button, click the Other tab, and clear the Enable Education expenses optimization during print checkbox.
    • You can also optimize education expenses for an open return by performing these steps.

      1. Choose Utilities > Education Expense Optimization.
      2. Click the Preview or Print button to run the optimization process. After the report has been previewed or printed, the Preview and Print buttons are automatically replaced with an OK button.
      3. Do one of the following:

        • Click OK after previewing or printing the summary report to automatically transfer the amounts shown on the report to the tax return.
        • Click Cancel after previewing or printing the summary report to return to data entry.

        Note: You can print the Education Expense Optimization Report to FileCabinet CS if you are licensed for FileCabinet CS and have it installed. After choosing Utilities > Education Expense Optimization, click the Print button, mark the Store image in FileCabinet CS checkbox, then click either the Print button or the To Cabinet button. (The To Cabinet button appears when the FileCabinet CS checkbox is marked and the Printer checkbox is not marked.)

Related topics

Share This