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pilotjohnny
New Member

While I did pay some of my tuition out of pocket, most was paid using FAFSA. Do I need to list this?

 
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GeoffreyG
New Member

While I did pay some of my tuition out of pocket, most was paid using FAFSA. Do I need to list this?

You don't have to list any educational expenditures if you don't want to; it's actually an entirely optional process.  But you may want to do so voluntarily, especially if you may be eligible for a tax benefit (a credit or deduction).

To the extent that your tuition and fees were paid for by grants and scholarships, these funds cannot be counted toward your educational expenses (although you would have to enter the data for them in the educational expenses section of TurboTax, in listed on Form 1098-T, so that the tax forms will calculate correctly).

To the extent that you used borrowed funds (FASFA arranged student loans, for example) to pay for school tuition and fees, then that money is considered just the same as your own for purposes of calculating the educational tax benefits for which you may otherwise be eligible.  The reasoning in the tax law for this is that, since the borrowed funds must eventually be paid back (just like a business loan), then the money is considered yours as you spend it . . . in this case on school tuition and fees.

Of course, your own purely out-of-pocket money paid toward tuition, fees, textbooks, etc. can count as well.

So, as to your question whether or not the FASFA funds need to be listed, the answer to that is that they need to be "included" or "considered" in the educational tax section of TurboTax; but the answer is no to the question asking if you must make an entry for educational expenses at all.  This latter choice is optional; just as it is optional for a taxpayer to take the standard deduction in lieu of itemizing his or her deductions.  But, we would still encourage you to do so, and by going through that process discovering if you are entitled to a tax benefit for higher education.

For further reference on all matters related to education tax benefits, including what counts and what does not, you can look to IRS Publication 970 (Tax Benefits For Education).  There is a wealth of information to be found there.  Here is a courtesy link to that document:

https://www.irs.gov/pub/irs-pdf/p970.pdf


Thank you for asking this question, and good luck with your academic studies.

View solution in original post

1 Reply
GeoffreyG
New Member

While I did pay some of my tuition out of pocket, most was paid using FAFSA. Do I need to list this?

You don't have to list any educational expenditures if you don't want to; it's actually an entirely optional process.  But you may want to do so voluntarily, especially if you may be eligible for a tax benefit (a credit or deduction).

To the extent that your tuition and fees were paid for by grants and scholarships, these funds cannot be counted toward your educational expenses (although you would have to enter the data for them in the educational expenses section of TurboTax, in listed on Form 1098-T, so that the tax forms will calculate correctly).

To the extent that you used borrowed funds (FASFA arranged student loans, for example) to pay for school tuition and fees, then that money is considered just the same as your own for purposes of calculating the educational tax benefits for which you may otherwise be eligible.  The reasoning in the tax law for this is that, since the borrowed funds must eventually be paid back (just like a business loan), then the money is considered yours as you spend it . . . in this case on school tuition and fees.

Of course, your own purely out-of-pocket money paid toward tuition, fees, textbooks, etc. can count as well.

So, as to your question whether or not the FASFA funds need to be listed, the answer to that is that they need to be "included" or "considered" in the educational tax section of TurboTax; but the answer is no to the question asking if you must make an entry for educational expenses at all.  This latter choice is optional; just as it is optional for a taxpayer to take the standard deduction in lieu of itemizing his or her deductions.  But, we would still encourage you to do so, and by going through that process discovering if you are entitled to a tax benefit for higher education.

For further reference on all matters related to education tax benefits, including what counts and what does not, you can look to IRS Publication 970 (Tax Benefits For Education).  There is a wealth of information to be found there.  Here is a courtesy link to that document:

https://www.irs.gov/pub/irs-pdf/p970.pdf


Thank you for asking this question, and good luck with your academic studies.

View solution in original post

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