I did not file my 1098-T last year

[musicalkaori]

Hello,

I did not file my 1098-T last year. I had very little grant help and no scholarships. I have student loans because of this. Do I need to file an amended return to reflect this? Do I need to file it in the first place? I will have another 1098-T this year as I am not quite finished with my education.

Please help!

Thank you.

[KrisD15]

It Depends.

Form 1098-T reports what was paid to the school, (Box 1) and the financial aid that was awarded to the student through the school (Box 5).

Basically, if what was paid to the school (Box 1) is MORE than what was received in Financial Aid (Box 5) there would be no tax due on Scholarship Income and the Taxpayer could get a tax credit. 

Form 1098-T is "Informational" to HELP you decide if you need to claim any taxable income or if you may claim an education credit. 

If you are a dependent, whoever claims you can claim the credit, but if there is any taxable income, you would claim that income.

Without more information, it is not clear whether you need to amend last year or if the 1098-T can be used for getting an education credit. 

TurboTax does have an interview concerning education expenses and scholarships/grants which you can go through to learn more. 

IRS Pub 970 explains the ramifications of education expenses and funding in detail. 

Your school financial office should provide guidance, 

AGAIN, if you are a dependent, give the 1098-T to the Taxpayer who claims you.

If you are not a dependent, financial aid which exceeds education expenses (Tuition, Books & Supplies) is taxable income.

If you are not a dependent, education expenses (Tuition, Books & Supplies) which exceeds financial aid could be used to claim a credit.

Student loans are the same as you paying since a loan is not financial aid.

IRS Pub 970 

[musicalkaori]

Hello,

I am not a dependent and am filing as Single. I am 27 years old working on my Bachelor's degree. Box 5 for the 2022 1098-T is higher than Box 1. I am trying to figure out if I need to amend last year's tax return, or just ignore that 1098-T and only do the one for this year. Or if I even need to file the 1098-T at all. I will not be making any payments to the loans until later this year. Does this help or make sense at all?

Thank you.

[KrisD15]

Yes,

The loans are immaterial at this point. You may claim an adjustment for the interest on these loans when you start repaying, but that is a subject for another time. Loans are like money out of your pocket. 

There are two different education credits, 

American Opportunity Tax Credit 

Lifetime Learning Credit 

If you have education expenses over scholarships/grants (FREE MONEY) then yes, more than likely it will be worth claiming the expenses as reported on the 1098-T. 

Not all expenses will be reported on the 1098-T if you purchased books and supplies (including Internet access if that is required for course study) outside of the school. Even books purchased at a school's bookstore may not be on the 1098-T. 

The American Opportunity Tax Credit (AOTC) can be quite valuable, up to $2,500. It can lower your tax liability and/or increase your refund. 

It is "REFUNDABLE" meaning even if you owe NO tax, you could get a $1,000 refund

It can only be used four times per student-

     If your parents (or anyone) claimed you as a dependent in the past and used the credit for your education expenses, it counts towards the limit 

     If you will have 5 years of expenses, decide if the credit should be saved for a future year when it will be more advantageous to your tax situation. 

     The credit "Maxes Out" with 4,000 expenses over aid, so if you paid 4,000 out of pocket (and the loans count as out of pocket) you should get the full AOTC. (there are income limits as well) 

The Lifetime Learning Credit is normally not as valuable as the AOTC, but has no limit to the times it can be claimed. 

HERE IS MORE INFORMATION 

TurboTax Tip 

TurboTax Ask the Experts Event 

[Hal_Al]

Q. I did not file my 1098-T last year. Did I need to file it in the first place?

A. No. The 1098-T is only an informational document. The numbers on it are not required to be entered onto your tax return.

Q. I did not file my 1098-T last year. Do I need to file an amended return to reflect this? 

A. Maybe or more likely, your parents may want to file an amended  return. 

The 1098-T is only an informational document. The numbers on it are not required to be entered onto your tax return. However receipt of a 1098-T frequently means your parents (sometime you) are  eligible for a tuition credit or possibly you have taxable scholarship income. 

Since you indicate that you have student loans, it's unlikely that you also have taxable scholarship, so that's (probably) out.  Tuition and other qualified expenses (fees, books and even a required computer), paid with loan money is eligible for a tuition credit of up to $2500 ($1000 of which is refundable).  That's why your parents should file an amended return. If you are not a dependent, there are some limitations on students, under 24, claiming the credit.