Submitted By: Metais
Answered: July 13, 2015 10:09 am

We gave our American granddaughter residing in France $7,000 for tuition. Is this deductible?

You can take a tuition and fees deduction only for a dependent, so if your granddaughter is not your dependent, you’re out of luck. If she were your dependent, the deduction is capped at $4,000 (you must have income below a set limit) and applies only to an educational institution eligible to participate in a student aid program administered by the U.S. Department of Education. Studying abroad is not a problem as long as the school administering the program meets this requirement.

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Tax Glossary

Estimated tax

Advance payment of current tax liability based either on wage withholdings or installment payments of your estimated tax liability. To avoid penalties, you generally must pay to the IRS either 90% of your final tax liability, or either 100% or 110% of the prior year’s tax liability, depending on your adjusted gross income.

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