Does tuition billed last year for this year's education count for this year?

[matthew-misiasze]

I didn't do my own taxes last year so I don't know how this was handled at the time, but my spring semester 2014 tuition was billed in December 2013 and was therefore recorded on my 2013 1098-T with box 7 checked.  I graduated in the spring of 2014 so that was the last semester I was billed for.  I was expecting to get a deduction for going to school and paying tuition this year but my 2014 1098-T has nothing in boxes 1 and 2.  I guess I understand this - the bill was recorded on my 2013 1098-T.

When I leave boxes 1 and 2 blank on my 2014 1098-T, TurboTax asks me if I got a 1098-T last year and asks if I paid tuition last year and asks if box 7 is checked, and I answer "yes" to all of those, but I still don't get any deduction.  Do I just not get anything because the bill came a few weeks before the new year or is the software missing something?

[Hal_Al · Accepted solution]

It doesn't matter when the the tuition was billed or what the 1098-T says. What matters is when was the tuition was actually PAID. If the spring 2014 tuition was paid in 2013, it was deductible (or counted toward the ed credit) in 2013.

If it wasn't paid until 2014, it gets reported on your 2014 tax return. That's one of the purposes of a December billing, to give the taxpayer the option of paying in 2013 or 2014.

[matthew-misiasze]

If it was paid in 2014, how do I enter that into TurboTax?

[Hal_Al]

Under box 2, at the 1098-T screen is a link: What if this is not what (student name) paid to the school. Click on that and you will be given a chance to enter what was actually paid.

[seppwf]

I was also billed in December with box 7 checked but paid in January...however I input the full amount as reported on the 1098-T on last years return(2014).  Can I claim the amount I paid in spring 2015 on this years return even though I guess I accidentally claimed it in 2014?  I'm pretty sure my deduction wasn't maximized last year and the difference wouldnt have mattered but I'm not sure.  If he didn't prepare his own taxes its likely the person who did, made the mistake I did and claimed the reported amount on the 1098 isn't it?

[Hal_Al]

You may only claim it for the year you paid it. For example, if you were billed $6000 in December and paid $4000, of it, in Dec and $2000 in 2015. You claim $4000 on your 2014 return and $2000 on your 2015 return.

[seppwf]

I understand what I should have done however looking back now I realize I accidentally claimed the full $12,000 on my 2014 return because that's what was on the 1098 at the time with box 7 checked.  $8,000 of which was for 2014 spring and fall tuition and $4,000 of that was for 2015 spring tuition.  I guess my question is can I claim that $4000 for this year.  Is it too late because I accidentally claimed it last year?  Do I need to amend last years return?  Would it be worth trying to sort out or should I just not claim anything this year and leave it as it is?

[Hal_Al]

You say what you claimed and when it was "for". What you don't say is when you paid it. You can only claim the $4000 for 2015, if you paid for it in 2015. If you paid the full $12,000 in 2014, you cannot claim anything on your 2015 return.

If that is the case, it will be worth while to sort it out. It most likely will not be necessary to amend 2014. Although you may have entered the full $12,000, probably only $4000 ($10,000 if you are a grad student) was actually used to calculate the tuition credit. Review 2014 form 8863

[seppwf]

Thank you for your help and quick response.  I paid $8,000 in 2014 and $4,000 in 2015.  I was a graduate student and it looks like 10,000 was used in part II on line 11 of my 8863.  My nonrefundable education credit was $858.  So since only 10,000 was used is the remaining 2,000 eligible for a credit or should I amend last years down to &8,000 and report $4,000 this year? Thanks again, you've been a big help.

[Hal_Al]

You should definitely use $4000 for 2015, because that's what you paid.
I don't think you need to amend 2014, if you only got $858. Even though you entered $10,000, it wasn't all used because it only took $4290 (much less than the $8000 allowed) to get you the $858 credit that got your tax bill to 0.

[seppwf]

Ya I kind of figured the full $10,000 wasn't used. I will report the $4,000 this year. Thanks for your help!

[atschmale]

Similar, but different question: My check for tuition was written at the end of December 2015, then cashed and applied to my student account in January 2016. The money was not been claimed in 2015. Should this be applied to 2015 (the year in which the check was written) or 2016 (the year in which the check was cashed and my bill was technically paid)?