I received the 1098-T form from the UC East Bay and I'd like to find out why my payment to my daughter's university is not being deducted on my taxes?

[sdbeng]

How do I make this work?

[LindaS5247]

Form 1098-T provides information about educational expenses that may qualify the student—or the student's parents or guardian, if the student is still a dependent—for education-related tax credits.
 

The amount that you are eligible to use to reduce your taxes is the amount paid for tuition and fees, minus the amount of scholarships you received. You can only receive a deduction or credit for the amount of expenses that you paid out of pocket. 

If the amount in Box 5 (your scholarships) is GREATER THAN the amount in Box 1 (or Box 2, whichever is filled out on your 1098-T), then you cannot use any expenses to reduce your tax bill. 

You must report the excess as taxable income on the federal tax return for the person issued the 1098-T.  

If the amount in box 5 is LESS THAN the amount in Box 1 (or Box 2, whichever is filled in on your 1098-T), then the difference is the amount that was paid out of pocket and that can be reported on your tax return to reduce your taxes.

Here's how to enter your 1098-T in TurboTax:

1. Open or continue your return
2. Go to Form 1098-T
3. If you land on Your Education Expenses Summary:
   • Select Edit next to the name of the student you're entering a 1098-T for (select Add A Student if the student isn't listed)
   • On the next screen, select Edit next to the school name. You can enter the info from your 1098-T on the following screen
4. If you land on Do you want to enter your higher education expenses?:
   • Answer Yes
   • Answer Yes to Did you get a 1098-T for this year? and Continue
   • On the next screen, you can choose how you'd like to add your 1098-T. You can upload a digital copy from your computer or type it in yourself. Select which option you'd like and Continue
5. If you need to enter a 1098-T for someone else, continue through the screens until you get to the Your Education Expenses Summary screen, then select Add A Student

Some important tips about entering this form:

• Enter your 1098-T exactly as is, even if the amounts are wrong (this is common). You'll get a chance to correct this info and enter additional expenses later on
• Leave blank boxes blank. Don't enter 0 for any blank boxes on the form, as this generates errors
• Parents: If the student listed on the 1098-T is your dependent, enter the 1098-T on your return, even if your dependent paid the tuition
• Students: If you're not being claimed as a dependent, enter the 1098-T on your return regardless of who paid the tuition, unless it was your employer. In that case, just keep the 1098-T with your tax records

Click here for "Guide to Tax Form 1098-T Tuition Statement"

 

[sdbeng]

I have the situation where the amount in box 5, which is zero, is LESS THAN the amount in Box 1 on the 1098-T, then the difference is the amount that was paid out of pocket and that can be reported on your tax return to reduce your taxes. However, there is no way to report this amount paid out of pocket on the tax return because we still don't qualify not sure why. I'm trying to understand, we send our daughter to the uni and we end up paying a huge tax bill.

[Hal_Al]

Your income may be too high to qualify for the tuition credit. 

• To claim the full credit, your modified adjusted gross income (MAGI) must be $80,000 or less ($160,000 or less for married filing jointly).
• You receive a reduced amount of the credit if your MAGI is over $80,000 but less than $90,000 (over $160,000 but less than $180,000 for married filing jointly).
• You cannot claim the credit if your MAGI is over $90,000 ($180,000 for joint filers).

[ErnieS0]

There are several reasons why you may not be able to deduct your daughter’s tuition:

1. Your income was too high. If your modified adjusted gross income is over $90,000 ($180,000 for married taxpayers filing joint), you can't claim the credit.
2. You paid tuition from a 529 or Coverdell ESA distribution.
3. You may have claimed the American Opportunity Tax Credit or Hope Credit for 4 years.
4. You may have answered some questions incorrectly. Review your entries in Expenses and Scholarships (Form 1098-T).