Well, if you are one of the unfortunate people who has kids then you understand how expensive they are. Especially when they get older and you decide to send them off to college. Looks like your wallet is going on the slim-fast diet.
If you have a kid going to school, you probably received a 1098-T in the mail. Let's discuss...
Question: What is a 1098-T anyway?
Answer: Form 1098-T: Tuition Payments Statement is the information return that colleges and universities are required to issue for the purpose of determining a student's eligibility for the Hope and Lifetime Learning education tax credits.Question: How can I get a copy of my 1098-T?
Answer: Form 1098-T: Tuition Payments Statement is the information return that colleges and universities are required to issue for the purpose of determining a student's eligibility for the Hope and Lifetime Learning education tax credits.Question: How can I get a copy of my 1098-T?
Answer: It's easy! Just use the Tax Credit Reporting Service (TCRS) student site at http://www.1098t.com/.
Click "Access My Record." Note that you are not required to submit any copy of the 1098-T with your tax return.
Click "Access My Record." Note that you are not required to submit any copy of the 1098-T with your tax return.
Question: What am I supposed to do with the 1098-T form?
Answer: Keep it for your records. Since the University sends your 1098-T information to the IRS, there is no need to attach a copy of the form to your tax return. The information contained in the 1098-T will help you to determine if you may claim the Hope or the Lifetime Learning education tax credits using IRS Form 8863: Education Credits [download].
Answer: Keep it for your records. Since the University sends your 1098-T information to the IRS, there is no need to attach a copy of the form to your tax return. The information contained in the 1098-T will help you to determine if you may claim the Hope or the Lifetime Learning education tax credits using IRS Form 8863: Education Credits [download].
Question: What does an amount in Box 1 mean?
Answer: Box 1 ("Payments received for qualified tuition and related expenses") of your 1098-T displays the net amount of payments received during the tax year (January - December) that were required as a condition of your enrollment and attendance. To "qualify," payments must relate to an academic period for which fees are due and payable during the tax year, and for which instruction begins no later than March of the following tax year. The amount is calculated by summing the "qualified" portions of registration and course materials fees, less any refunds or reductions of these fees due to enrollment changes. This net amount is sent to the IRS.
Answer: Box 1 ("Payments received for qualified tuition and related expenses") of your 1098-T displays the net amount of payments received during the tax year (January - December) that were required as a condition of your enrollment and attendance. To "qualify," payments must relate to an academic period for which fees are due and payable during the tax year, and for which instruction begins no later than March of the following tax year. The amount is calculated by summing the "qualified" portions of registration and course materials fees, less any refunds or reductions of these fees due to enrollment changes. This net amount is sent to the IRS.
Question: What does an amount in Box 4 mean?
Answer: Box 4 ("Adjustments made for a prior year") shows any refunds during the current year for payments of "qualified tuition and related expenses" reported on a 1098-T for a prior tax year. For example, if you paid Winter 2007 registration fees when due in December 2006, "qualified tuition" for that quarter would have been reported on your 1098-T for 2006. If you subsequently received a refund of Winter 2007 registration fees in January 2007, the amount refunded would be reported in Box 4 for tax year 2007. Refunds may be the result of changing from full-time to part-time study, nonresident to resident classification, or cancellation/withdrawal.
Answer: Box 4 ("Adjustments made for a prior year") shows any refunds during the current year for payments of "qualified tuition and related expenses" reported on a 1098-T for a prior tax year. For example, if you paid Winter 2007 registration fees when due in December 2006, "qualified tuition" for that quarter would have been reported on your 1098-T for 2006. If you subsequently received a refund of Winter 2007 registration fees in January 2007, the amount refunded would be reported in Box 4 for tax year 2007. Refunds may be the result of changing from full-time to part-time study, nonresident to resident classification, or cancellation/withdrawal.
Question: What does an amount in Box 5 mean?
Answer: Box 5 ("Scholarships or grants") shows the net amount of certain forms of educational assistance that were received or applied to your student account during the tax year (January - December), regardless of the quarter for which the funds originally were intended. For example, if you received a check for Fall 2006 Pell Grant in 2007, the amount of the check would be added into Box 5. Note that the amount in Box 5 may include fee payments and other credits, as well as checks. Any subsequent adjustments or reductions to educational assistance that occurred in the same tax year are summed into the amount. The net amount is sent to the IRS.
Answer: Box 5 ("Scholarships or grants") shows the net amount of certain forms of educational assistance that were received or applied to your student account during the tax year (January - December), regardless of the quarter for which the funds originally were intended. For example, if you received a check for Fall 2006 Pell Grant in 2007, the amount of the check would be added into Box 5. Note that the amount in Box 5 may include fee payments and other credits, as well as checks. Any subsequent adjustments or reductions to educational assistance that occurred in the same tax year are summed into the amount. The net amount is sent to the IRS.
... now just hope your kid graduates and pays you back in the future. ;-)
3 comments:
Table 3-1.Comparison of Education Credits
http://www.irs.gov/publications/p970/ch03.html#d0e3766
Can You Claim the Credit
The following rules will help you determine if you are eligible to claim the lifetime learning credit on your tax return.
Who Can Claim the Credit
Generally, you can claim the lifetime learning credit if all three of the following requirements are met.
You pay qualified education expenses of higher education.
You pay the education expenses for an eligible student.
The eligible student is either yourself, your spouse, or a dependent for whom you claim an exemption on your tax return.
For fillable 1098 T forms or any tax form you need, you may visit this website http://goo.gl/LattWC
Download, edit, print, save, sign, email or even fax your tax form online.I know the software is free if you invite a couple of friends to try it out as well using this link goo.gl/oQvpJF
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