If you are not being claimed by your parents, you should be able to benefit from your 1098-T, unless there is another problem. The following discussion will help you determine what the issue is:
The following
is a detailed discussion of who qualifies and who does not benefit from
1098-T.
The main reasons you will not
get the credit are:
- you are
being claimed as a dependent on someone else's return
- you are
married, but choose to file separately
- your
Modified Adjusted Gross Income exceeded phase out levels
- the
tuition was paid with tax-favored money
The Tuition and Fees Deduction
is set to expire at the end of 2016. It allows you to deduct up to
$4,000 from your income for qualifying tuition expenses paid for you, your
spouse, or your dependents.
You can deduct qualifying
expenses paid in the tax year for:
- Education
during in the year, or
- Education
that begins during the year, or
- Education
that begins during the first three months of the following year.
Qualifying expenses include
what you pay in tuition and mandatory enrollment fees to attend any accredited
public or private institution above the high school level.
You cannot take a deduction
for:
- Room and
board, optional fees (such as for student health insurance),
transportation, or other similar personal expenses.
- Course-related
books and supplies, unless you are required to buy them directly from the
school.
- Any
course involving sports, games or hobbies, unless it’s part of the degree
program.
You have to subtract any
scholarships, educational assistance, or other nontaxable income spent for
educational purposes (other than gifts or inheritances). For example, if your
employer offers a tuition reimbursement plan as a fringe benefit that pays
$1,000 of the cost of a $1,500 course, only the remaining $500 would count for
purposes of this deduction.
Exceptions:
- If you
can be claimed as a dependent on your parents' or someone else's tax
return, you cannot claim the higher education deduction.
- If you
are married and choose the married filing separately tax status, you
cannot take this deduction.
The deduction is $0, $2,000 or
$4,000 depending on your Modified Adjusted Gross Income (MAGI).
- $4,000
deduction for MAGI of $65,000 or less ($130,000 or less for joint
returns).
- $2,000
deduction for MAGI between $65,001 and $80,000 (between $130,001 and
$160,000 for joint returns).
- $0 if
your MAGI exceeds these limits.
No double-dipping
You can't deduct or take a
credit for the same expense twice.
If you deduct these expenses
under some other provision of the tax code, such as for employee or business
expenses, you cannot also deduct the expenses for the Tuition and Fees
Deduction.
Also, you can’t deduct expenses
paid with tax-favored money including:
- Tax-free
interest from savings bonds
- Tax-free
earnings from qualified state tuition program (Section 529 Plans)
- Tax-free
earnings from Coverdell Education Savings Account
The Tuition and Fees Deduction
cannot be combined with the American Opportunity or Lifetime Learning credits
for any single student in a single tax year.
For more information
For a general overview, see IRS
Publication 970: Tax Benefits for Education. For more information on deducting higher education
expenses, see IRS Topic 457: Tuition and Fees Deduction.
