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TiTi38
New Member

I paid way more in tuition than what shows on the 1098T.

How do or where do I put the full amount of tuition paid?
19 Replies
Carl
Level 15

I paid way more in tuition than what shows on the 1098T.

If you received a 1098-T for 2015, understand that the student is the only person on the planet that received that specific 1098-T. A copy is not sent to the IRS. The 1098-T is "informational only" for the student. You are not required to utilize the information on the 1098-T if you don't want to. Also, it’s not that uncommon for the 1098-T to be wrong either.

 The best thing to do is to have the student log on to their college account and go to their financials section of their account. There they can get a detailed printout of everything which can be used for filing taxes. But first, let me provide more information (which you may already be aware of) which may help alleviate confusion.

Understand that the IRS works in calendar years, while colleges work in academic years. So the reality is, it takes 5 calendar years to get that four year degree. So with that said:

 - Qualified education expenses are claimed in the tax year they are paid. It does not matter what year they pay "for".

 - Scholarships and grants are claimed as taxable income (initially) in the tax year they are received. It does not matter what year that scholarship or grant is *for*.

So when looking at the detailed printout, be careful. What you are concerned with is the date a qualified expense was paid/applied. You should completely ignore the start date of the class it applies to.

If you don't find the below helpful because you may already know it, then I'm sure others reading this thread will. So please bear with me. (I like to be complete - it's just me)

              • College Education Expenses

Understand that figuring out who claims the student as a dependent, and determining who claims the education expenses & credits, is two different determinations. It depends on the specific situation as outlined below. After you read it, I have also attached a chart at the bottom. You can click on the chart to enlarge it so you can read it. If it’s still to hard to read on your screen then right-click on the enlarged image and elect to save it to your computer. Then you can double-click the saved image file on your computer to open it, and it will be even easier to read.

 Here’s the general rules gisted from IRS Publication 970 at http://www.irs.gov/pub/irs-pdf/p970.pdf Some words are in bold, italicized, or capitalized just for emphasis. This is because correct interpretation by the reader is everything. Take the below contents LITERALLY, and do not try to “read between the lines”. If you do, you’ll interpret it incorrectly and risk reporting things wrong on your taxes. For example, there is a vast difference between “can be claimed” and “must be claimed”.  The first one indicates a choice. The second one provides no choice.

If the student:

Is under the age of 24 on Dec 31 of the tax year and:

Is enrolled in an undergraduate program at an accredited institution and:

Is enrolled as at least a half time student for one academic semester that begins during the tax year, (each institution has their own definition of a half time student) and:

the STUDENT did NOT provide more that 50% of the STUDENT’S support (schollarships/grants received by the student ***do not count*** as the student providing their own support)

Then:

The parents will claim the student as a dependent on the parent's tax return and:

The parents will claim all schollarships, grants, tuition payments, and the student's 1098-T on the parent's tax return and:

The parents will claim all educational tax credits that qualify.

If the student will be filing a tax return and:

The parents qualify to claim the student as a dependent, then:

The student must select the option for "I can be claimed on someone else's return", on the student's tax return. The student must select this option ieven f the parent's qualify to claim the student as a dependent, and the parents do not claim them.

Now here’s some additional information that may or may not affect who files the 1098-T. If the amount of scholarships/grants exceeds the amount of qualified education expenses, the parent will know this when reporting the education on their tax return, because the parent will not qualify for any of the tax credits. (They only qualify for tax credits based on out-of-pocket qualified expenses not covered by scholarships/grants.)  Also, the parent’s will not qualify for the credits depending on their MAGI which is different for each credit, and depends on the marital status of the parent or parents.

In the case where scholarships/grants covers “all” qualified education expenses, the parent’s don’t need to report educational information on their dependent student at all – but they still claim the student as a dependent if they “qualify” to claim the student.

 If the scholarships/grants exceed the qualified education expenses, then the student will report the 1098-T and all other educational expenses and scholarships/grants on the student’s tax return. The student will pay taxes on the amount of scholarships/grants that are not used for qualified education expenses. However, if the student’s earned income reported on a W-2, when added to the excess scholarships/grants does NOT exceed $6200, then the student doesn’t even need to file a tax return, and nothing has to be reported.

If the student has any other taxable income not reported on a W-2, and it exceeds $400, (not including taxable portion of scholarships/grants) then most likely it’s considered self-employment income. That will require a tax return to be filed and the student will have to pay the Self-Employment tax on that income.

Finally, regardless of the student’s W-2 earnings, if any taxes were withheld on those earnings and it was less than $6200, then the student should file a tax return so as to get those withheld taxes refunded.

 


TheOrganezized10
Returning Member

I paid way more in tuition than what shows on the 1098T.

Carl, 

On every other website I searched, including TurboTax, it asserts that indeed the IRS does receive a copy of the 1098T form by February 28.  I noticed that in responding to the member's question you said that for 2015 the IRS would not have received a copy of the form, I don't know how they would verify if a student did indeed attend college, so that was only the case back then? 

Hal_Al
Level 15

I paid way more in tuition than what shows on the 1098T.

Yes, the IRS gets a copy of the 1098-T, just like it gets a copy of every other tax form.  The real question is what do they do with it.  The IRS has increased matching efforts, since making the 1098-T "mandatory". That does not not mean that you are limited to only claiming what's on the 1098-T

TheOrganezized10
Returning Member

I paid way more in tuition than what shows on the 1098T.

Hal_Al,

 

I'm assuming that if a student thinks the 1098T is not reflective of the actual costs and files his or her return, the IRS will ask for proof of the the higher amount. 

Hal_Al
Level 15

I paid way more in tuition than what shows on the 1098T.

That's possible, if you are audited. Keep copies of your records. School billing statements usually provide the proof needed.  But, you don't have to provide any proof when you file your return.  

AnnetteB6
Expert Alumni

I paid way more in tuition than what shows on the 1098T.

If you paid more in tuition than has been reported on the Form 1098-T,  you can enter the amounts that you paid. 

 

In the section where you are entering information from the Form 1098-T, there is a link or a check-box that will expand that page so that you can enter the information from your Form 1098-T and the amount that you actually paid for tuition. 

 

Look for the link or check-box directly under the entry for Box 1 of the 1098-T.  It says something like “This is not what I paid to this school?”.  Click that link or check the box and an additional box will open up to allow you to enter the actual amounts that were paid for tuition. 

 

To get to the section where you can enter/edit the information on Form 1098-T, start by going to the Education section of your return using these steps:  

  • On the top row of the TurboTax online screen, click on Search (or for CD/downloaded TurboTax locate the search box in the upper right corner)
  • This opens a box where you can type in “education” (be sure to enter exactly as shown here) and click the magnifying glass (or for CD/downloaded TurboTax, click Find)
  • The search results will give you an option to “Jump to education
  • Click on the blue “Jump to education” link

Then, if you are not prompted to enter your 1098-T, go through the entire education expenses section of your return until you reach the screen titled “Your Education Expenses Summary”, then follow these steps:

  • Click Edit next to the student name.
  • On the screen titled “Here’s your Education Summary”, click Edit beside Tuition.
  • Enter the information from your Form 1098-T.

 

@TiTi38

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Carl
Level 15

I paid way more in tuition than what shows on the 1098T.

This is a non-issue really. You enter the 1098-T exactly as printed and press on with life. A few screens later the program will specifically and explicitly ask for qualified education expenses paid *in the tax year* that are not included on the 1098-T. It will also ask for scholarships received/awarded *in the tax year* that were not included on the 1098-T.

 

sachin25
New Member

I paid way more in tuition than what shows on the 1098T.

Thanks for sharing that if 1098-T amount was less, the missing amount can still be entered when filing the tax return as other "qualified education expenses".

 

Now the question is about the amount paid for the dorm to the university for lodging and food ? Is that a "qualified education expenses" ?

 

For my older child - the university has included that amount. For my younger child - they have not. I can still enter it on the tax return. But I am reading in some  places that room and meals don't qualify? Some guidance here would be appreciated.

 

EDIT:

Reading more from Carl - Thanks Carl - Looks like what is qualified education expenses is different based on source of funds - scholarship OR 529 plan or out of pocket..

 

" From earlier posting of Carl


1099-Q Funds

First, scholarships & grants are applied to qualified education expenses. The only qualified expenses for scholarships and grants are tuition, books, and lab fees. that's it. If there is any excess, then it's taxable income. It automatically gets transferred to line 21 of the 1040 with an annotation of "SCH" next to it.

 

Next, 520/Coverdell funds reported on 1099-Q are applied to qualified education expenses. The qualified expenses for 1099-Q funds are tuition, books, lab fees, AND room & board. That's it. If there are any excess 1099-Q funds they are taxable. The amount is transferred to line 21 of the 1040 with an annotation of "SCH" next to it.

 

Finally, out of pocket money is applied to qualified education expenses. The only qualified expenses for out of pocket money is tuition, books, and lab fees. Room & board is NOT a qualified expense for out of pocket money."

Carl
Level 15

I paid way more in tuition than what shows on the 1098T.

Any amount in box 1 of the 1098-T is a qualified education expense. Period. While that amount very well could include room and board, I seriously doubt it would since the IRS does not list room and board as a qualified expense anywhere in IRS Publication 970.

Are there any 1099-Q distributions from a Coverdell or 529 plan involved here?

Hal_Al
Level 15

I paid way more in tuition than what shows on the 1098T.

Room and board (R&B) are qualified expenses for a  Qualified Tuition plan (529, ESA) distribution on a 1099-Q. R&B are not qualified expenses for  a tuition credit or deduction.  It's highly unlikely that the school made the big mistake of putting R&B in box 1 of the 1098-T.

 

The 1098-T is only an informational document. The numbers on it are not required to be entered onto your tax return. 

If you claim the tuition credit, you do need to report that you got one or that you qualify for an exception (the TurboTax interview will handle this)

You claim the tuition credit, or report scholarship income or exclude earnings from a  1099-Q, based on your own financial records, not the 1098-T. 

Late12
Level 1

I paid way more in tuition than what shows on the 1098T.

I feel like you know your 1098T:), hoping you know how it works w 1099-Q:

 

We withdrew from child's 529 a/c AND PAID her law school tuition for fall 2019 and spring 2020 in 2019. They definitely received spring 2020 in 2019, however the school only put fall tuition as payment received on 1098T, saying they capped box 1 at amount they had billed (I thought we were billed, but maybe we just knew would be same amount as fall). From everything I am reading, I feel like I can put in both semesters for qualified expenses (on the turbotax link for diff amt), and then I will not plan on entering Spring 2020 as 2020 expenses of course. Need this to be true so daughter does not have to pay tax on 529 withdrawal w/o qualified expenses.

 

Thank you for time & any help!

Carl
Level 15

I paid way more in tuition than what shows on the 1098T.

Colleges work in academic years, while the IRS works in calendar years. So the fact is, it takes you five calendar years to get that four year degree.  With that said:

- Qualffied education expenses are claimed in the tax year they are paid. It *does* *not* *matter* what tax year is paid *for*.

 - Scholarships, grants, 529 withdrawals are claimed as taxable income (initially) in the tax year they are received. It "does" "not" "matter" what tax year the money was received "for". (the taxability of the funds are offset and "cancelled out" by the qualified expenses they are used to pay for.)

We withdrew from child's 529 a/c AND PAID her law school tuition for fall 2019 and spring 2020 in 2019.

Then the withdrawal amount that was used to pay "qualified" as well as allowed expenses is not taxable. Period. End of Story.

 

Since you took the withdrawal in 2019, and made the payment in 2019, you're good to go. What the school says, or what the 1098-T says is totally and completely irrelevant. After you enter the 1098-T in the program, later screens will ask you for information that was not included on the 1098-T. You enter it there.

When the school credits the payment is also irrelevant. What "is" relevant is when you can "prove" you made the payment. Assuming you have a receipt, or can show the transaction through some other method (such as a bank statement showing a transfer directly to the college) this should not be an issue.

tkell222
Level 1

I paid way more in tuition than what shows on the 1098T.

my statement on my college website says that I paid $5,136 in 2020 but the 1098-t box 1 says 4,033.  it also says 4033 in ox 5.  Why are these different from the information I got on my my college website for my account?  I am not sure how to fill out my tax return with this discrepancy.  It greatly affects my refund to not report the 5,136.

 

Thank you!

Hal_Al
Level 15

I paid way more in tuition than what shows on the 1098T.

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 you are either eligible for a tuition credit or deduction or possibly your student has taxable scholarship income. 

 

If you claim the tuition credit, you do need to report that you got one or that you qualify for an exception (the TurboTax interview will handle this)

 

You claim the tuition credit, or report scholarship income, based on your own financial records, not the 1098-T. In the 1098-T screen, click on the link "What if this is not what I paid the school" underneath box 1. You will then be able to enter the actual amounts paid. 

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