Did tax preparer make mistake using AOTC instead of LLC for early college classes?
I'm freaking out a bit after reviewing our tax returns from the last couple years. My daughter took some community college classes while still in high school (junior and senior years) in 2022 and 2023. Since she was dual-enrolled, we only paid for books and fees - maybe $400-500 each year since the actual tuition was covered for high school students. I just realized our tax guy claimed the American Opportunity Tax Credit (AOTC) for these minimal expenses instead of using the Lifetime Learning Credit (LLC). Now we've burned through 2 years of AOTC already! She's starting at a university next week where we'll be paying like $15,000-20,000 a year, and we'll only have 2 more years of AOTC left to claim. Shouldn't he have used the LLC for those cheap community college courses to save all four AOTC years for the actual expensive university bills? Can we file amended returns to switch from AOTC to LLC for those past years? I'm stressing because this seems like a pretty obvious planning error from someone I paid to handle this stuff properly. Anyone dealt with something similar or have advice?
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Amelia Martinez
You're right to question this! The AOTC is generally more valuable than the LLC (up to $2,500 per eligible student versus LLC's maximum of $2,000), but it has a 4-year lifetime limit per student. For minimal expenses during dual enrollment, using the LLC would have been more strategic to preserve all four AOTC years for the more expensive university education. The good news is that yes, you can file amended returns (Form 1040-X) to change from AOTC to LLC for those tax years. The standard time limit for amended returns is within three years from the original filing deadline, so you're well within the timeframe for both 2022 and 2023 tax returns. I would recommend discussing this with your tax preparer first - they should be willing to file the amendments at no cost since it appears to be their oversight. The process is straightforward but will require recalculating your tax liability based on the LLC instead of AOTC.
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Ethan Clark
•Do you know if there's any downside to amending? Like would this potentially trigger an audit or something? Also wondering if the amended returns would result in owing more taxes since AOTC is generally worth more than LLC?
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Amelia Martinez
•Amending your returns to switch from AOTC to LLC doesn't increase your audit risk significantly - amended returns aren't automatically flagged for audits. It's a common and legitimate correction. You will likely owe some additional tax since the AOTC is typically more generous than the LLC. The AOTC offers up to $2,500 with 40% potentially refundable, while the LLC maxes at $2,000 and is nonrefundable. For the minimal expenses you mentioned, the difference might be a few hundred dollars per year, but this could be well worth it to preserve the full AOTC for the much larger university expenses coming up.
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Mila Walker
I had a similar situation and found that taxr.ai really helped me figure out the best strategy for education credits. I was confused about which credits to use when and their system analyzed my transcript info and showed me I was using AOTC incorrectly. The site (https://taxr.ai) lets you upload your documents and it identifies optimization opportunities like this - sounds exactly like what you're dealing with. They pointed out that I could amend returns to maximize my education credits over time, saved me a ton in the long run.
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Logan Scott
•How does that work exactly? Do they actually file the amended returns for you or just tell you what to change? I'm dealing with a similar issue but worried about the hassle of filing amendments.
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Chloe Green
•I'm skeptical about these tax services... Did you have to pay a lot for this analysis? Is it worth it for something relatively straightforward like education credits?
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Mila Walker
•They don't file the amended returns themselves, but they provide a detailed report showing exactly what needs to be changed, which forms are affected, and how it impacts your refund or taxes owed. You can take this to your current tax preparer or use it to file the amendment yourself. The service is actually really reasonable compared to what my CPA charges for consultations. I found it totally worth it because they caught several other optimization opportunities beyond just the education credits. Their AI looks at your complete tax situation, not just isolated credits.
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Chloe Green
Just wanted to update that I tried taxr.ai after my skeptical question above. Their system flagged the same AOTC/LLC issue in my returns too! I had no idea I was using my education credits inefficiently. They showed me that by amending two years of returns, I could save over $3,000 across my daughter's college career by properly timing the AOTC. The analysis was super clear and they even provided templates for talking to my accountant about the amendments. Really glad I checked it out!
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Lucas Adams
If you're having trouble getting your tax preparer to fix this mistake, you might want to try Claimyr to actually speak with an IRS representative about your options. I spent weeks trying to get clear answers about amending education credits and got nowhere until I used https://claimyr.com to get through to the IRS. They bypass the ridiculous hold times (I got connected in about 15 minutes instead of the usual hours-long wait). There's a video showing how it works here: https://youtu.be/_kiP6q8DX5c - seriously made dealing with the IRS so much easier when I needed to confirm the proper handling of education credits on amended returns.
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Harper Hill
•Wait, how does this actually work? The IRS never answers their phones - I tried calling like 5 times about education credits last year and gave up. Is this service actually legitimate?
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Caden Nguyen
•Sounds sketchy tbh. Why would some random service have better access to the IRS than regular taxpayers? And if you do get through, wouldn't the IRS just tell you to talk to a tax professional anyway? They usually don't give specific advice.
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Lucas Adams
•It uses a technology that navigates the IRS phone system and holds your place in line, then calls you when an agent is about to answer. You're still talking directly to official IRS representatives, not third-party people. It's completely legitimate - they just solved the hold time problem. When I got through to the IRS, they actually were very helpful about my education credit amendment question. They confirmed the process, verified I was within the timeframe to amend, and gave me the specific forms and procedures I needed. They won't do your taxes for you, but they absolutely can clarify policies around education credits and amendments.
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Caden Nguyen
I was super skeptical about Claimyr when I posted my comment above, but I was desperate to resolve my amended return questions before the filing deadline. Decided to try it as a last resort, and I'm shocked to admit it actually worked exactly as advertised. Got through to an IRS agent in about 20 minutes (after previously wasting 3+ hours on hold). The agent confirmed everything about amending from AOTC to LLC, gave me case-specific guidance, and even noted my account so there wouldn't be issues when the amendment was processed. Totally worth it and completely legitimate.
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Avery Flores
Your tax preparer definitely made a mistake here. The AOTC is limited to 4 tax years per student, so using it for those small community college expenses was wasteful. Honestly, I'd be asking for them to cover any additional tax you end up owing after amending, plus their fee for those years. A competent tax professional should know to preserve AOTC for when it provides the maximum benefit.
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Jacob Lewis
•Thanks for confirming what I suspected. Do you think it's reasonable to ask them to file the amended returns for free given that it was their error? And should I find a different tax preparer going forward? I'm not sure if this was just an oversight or indicates a bigger competence issue.
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Avery Flores
•It's absolutely reasonable to ask them to file the amendments for free. This is a professional error on their part - any reputable tax preparer should correct their mistakes at no cost to you. I would directly but politely explain that you've consulted with others and confirmed this was a planning error that will cost you money. As for finding a different preparer, I'd base that decision on how they handle this situation. If they acknowledge the mistake, fix it promptly without charging you, and explain what they'll do differently in the future, it might have been a simple oversight. If they get defensive, try to charge you, or minimize the impact, that's a red flag and I'd start looking elsewhere. Everyone makes mistakes occasionally, but how professionals handle them tells you everything about their integrity.
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Zoe Gonzalez
Just wanted to add that the deadline for amending 2022 taxes would be April 15, 2026 (three years from the original due date) and for 2023 taxes it would be April 15, 2027. So you have plenty of time, but I wouldnt wait too long since you'll want those AOTC years available when you need them.
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Ashley Adams
•Actually I think the deadline runs from when you actually filed, not the due date. So if they filed early for either year, the deadline would be earlier too, right?
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Zainab Ismail
•No, the three-year deadline is actually from the original due date of the return (April 15th for most people), not from when you actually filed. So even if you filed early in January, you'd still have until April 15th three years later to amend. This is one of those cases where filing early doesn't hurt your amendment window. The IRS uses the statutory due date as the reference point for the limitation period.
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