Sign Up

Why sign in to the Community?

  • Submit a question
  • Check your notifications
or and start working on your taxes
cancel
Showing results for 
Search instead for 
Did you mean: 
jqbarnes705
New Member

I recently received a proposed change to my 2016 1040A regaurding my education credits. I am not sure where this specific amount came from upon reviewing my documents.

 
1 Best answer

Accepted Solutions
Hal_Al
Level 15

I recently received a proposed change to my 2016 1040A regaurding my education credits. I am not sure where this specific amount came from upon reviewing my documents.

 Read the IRS letter carefully to see which technicality they are after you for.

The IRS has begun cracking down on schools that send out a 1098-T with box 1 blank. They are not always accepting an amount in box 2, of a 1098-T, as proof that you paid tuition. There was no additional proof required at the time you filed your return. The IRS wants the proof , now, after the fact. TurboTax did nothing wrong.  There was nothing you could do to prevent this. This is a failure of the tax system. The school could have done a better job with the 1098-T, but even that statement is an oversimplification. You only need to prove you actually paid tuition, with school statements and cancelled checks and/or bank or credit card statements. 

A student, under age 24, is only eligible for the refundable portion (the $1000 on line 44 of form 1040A [line 68 on form 1040]) of the American Opportunity Credit if he supports himself by working. You cannot be supporting yourself on parental support, 529 plans or student loans & grants. You must have actually paid tuition, not had it paid by scholarships & grants.  It is usually best if the parent claims that credit.  The age 24 rule is another common reason for an IRS letter. You may only need to prove, to them,  that more than half your support came from earned income.

Also See   https://www.irs.gov/individuals/education-credits-questions-and-answers Scroll down to “I received a letter from the IRS questioning my AOTC claim. What should I do?”

View solution in original post

1 Reply
Hal_Al
Level 15

I recently received a proposed change to my 2016 1040A regaurding my education credits. I am not sure where this specific amount came from upon reviewing my documents.

 Read the IRS letter carefully to see which technicality they are after you for.

The IRS has begun cracking down on schools that send out a 1098-T with box 1 blank. They are not always accepting an amount in box 2, of a 1098-T, as proof that you paid tuition. There was no additional proof required at the time you filed your return. The IRS wants the proof , now, after the fact. TurboTax did nothing wrong.  There was nothing you could do to prevent this. This is a failure of the tax system. The school could have done a better job with the 1098-T, but even that statement is an oversimplification. You only need to prove you actually paid tuition, with school statements and cancelled checks and/or bank or credit card statements. 

A student, under age 24, is only eligible for the refundable portion (the $1000 on line 44 of form 1040A [line 68 on form 1040]) of the American Opportunity Credit if he supports himself by working. You cannot be supporting yourself on parental support, 529 plans or student loans & grants. You must have actually paid tuition, not had it paid by scholarships & grants.  It is usually best if the parent claims that credit.  The age 24 rule is another common reason for an IRS letter. You may only need to prove, to them,  that more than half your support came from earned income.

Also See   https://www.irs.gov/individuals/education-credits-questions-and-answers Scroll down to “I received a letter from the IRS questioning my AOTC claim. What should I do?”

View solution in original post

Dynamic AdsDynamic Ads
Privacy Settings
v