I have already encountered several instances of Form 1098-T this tax season. For some of the students, I have the "full facts" separate from the tax document and now based on my observations I have a few questions to run by the board members.
#1. It appears most colleges prefer to enter the amounts in box 2 (amounts billed) and not in box 1 (payments received). Don't they already know the facts?
#2. Generally speaking, with the student bills in hand it is not overly difficult to come up with the "correct" numbers to match those in box 2. It is my understanding, re box 7, that early 2009 expenses (such as for spring semester of the current year) can certainly be included in the 2008 total, especially since many students/parents pay such expenses prior to the end of the earlier calendar year. What I don't understand is I have seen several instances where three semesters are included (spring 2008, fall 2008, and spring 2009). What's up with that, i.e. why did they not include the spring 2008 expenses in the 2007 Form 1098-T just to be consistent?
#3. The IRS rules state that where a student receives a scholarship, he can "use" those funds to offset either qualifying expenses (tax free income, lower credit) or offset the non-qualifying expenses (potentially taxable income, higher credit). Is it as simple as that?
#4. Are funds paid by ROTC (military service commitment exists after graduation) a scholarship, a government payment, or neither? So far such payments seem NOT to be included in box 5, although amounts in box 2 may have been adjusted.
My experience is that, with the proper facts, I can on my own easily reach the correct amounts to use for the education credits and/or tuition/fees deduction. The Form 1098-T generally seems only to confuse the matters, especially when I have to start explaining MY numbers to a parent.
I can seriously approach the idea of calling it a "worthless document."
Am i missing something here?? Thanks for any input.
FE
#1. It appears most colleges prefer to enter the amounts in box 2 (amounts billed) and not in box 1 (payments received). Don't they already know the facts?
#2. Generally speaking, with the student bills in hand it is not overly difficult to come up with the "correct" numbers to match those in box 2. It is my understanding, re box 7, that early 2009 expenses (such as for spring semester of the current year) can certainly be included in the 2008 total, especially since many students/parents pay such expenses prior to the end of the earlier calendar year. What I don't understand is I have seen several instances where three semesters are included (spring 2008, fall 2008, and spring 2009). What's up with that, i.e. why did they not include the spring 2008 expenses in the 2007 Form 1098-T just to be consistent?
#3. The IRS rules state that where a student receives a scholarship, he can "use" those funds to offset either qualifying expenses (tax free income, lower credit) or offset the non-qualifying expenses (potentially taxable income, higher credit). Is it as simple as that?
#4. Are funds paid by ROTC (military service commitment exists after graduation) a scholarship, a government payment, or neither? So far such payments seem NOT to be included in box 5, although amounts in box 2 may have been adjusted.
My experience is that, with the proper facts, I can on my own easily reach the correct amounts to use for the education credits and/or tuition/fees deduction. The Form 1098-T generally seems only to confuse the matters, especially when I have to start explaining MY numbers to a parent.
I can seriously approach the idea of calling it a "worthless document."
Am i missing something here?? Thanks for any input.
FE
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