Yes, you can deduct your DFAS repayment as as Miscellaneous Deduction.
Here is a data entry for repayment of $3000 or less:
- Federal Taxes
- Deductions
& Credits
-
Other Deductions &
Credits, select Other Deductible
Expenses, select No to
Generation Skipping tax question and No to
Less Common Expenses, Yes to
Any other Deductions that are not subject to the 2 % limitation, enter
description Repayment DFAS Form 705 and
the amount.
For repayment on $3000 or more, you may use the
deduction instructions above or you may also figure out the credit. Please click here. To make
that choice, use the method (deduction above or credit explained below)
that results in less tax. You won't be able to do it online, cd/download would
be needed.
Your 2nd question: your parents can claim 1098-T only if they claim you as their dependent.
