1098-T Calculations

[dexrobinson55]

When you are working with a client and they have expenses not reported on 1098-T Tuition.  What would be the best way to calculate their other education expenses from their bank account US Bank?  If this account is a business account and they no longer active with receiving income from the business, would the taxpayer or customer have the right to report expenses for business as well as claim these education on their 1098-T other fees when they file their taxes.   

Appreciate all the community who can respond and help solve this issue. 

Kindly, 

Dexter R, Tax Expert with over 28 years Experience as Federal and State Accountant, Realtor, and MBA Scholar

[VictoriaD75]

Bank transactions alone are not enough to provide substantiation of deductible expenses. Taxpayers need to maintain receipts, invoices, etc. that contain details of the deductible expenses. Furthermore, a personal expense paid out of a business account does not make it a business expense. Expenses deducted for a business must fall into the category of "ordinary and necessary." This means the expense is commonly found in the specific business and is helpful and appropriate in running the business. There are specific rules related to the deduction of education expenses for businesses.

If the taxpayer wants to use the 1098-T to claim education credits, this is a personal expense. Qualified education expenses are personal in nature. You cannot deduct them as business expenses and also use them to claim education credits. Qualified education expenses include tuition, fees, and course-related books, supplies or equipment. Room and board is not a qualified education expense and cannot be included in determining education credit amounts. 

How do Education Credits Work?

@dexrobinson55