This is what I mean when I said in another post how the client is looking for you to put words in there mouth! They want you to tell them how much they paid. Just had the same thing on Friday, I called and asked taxpayer "It says on the form 1098T you were billed $8,000 for tuition, what I need to know is how much did you actually pay? Could be timing differences, such as billed in December but you didn't pay until Jan 09, or maybe a class was dropped and although billed you were refunded, or for some reason a bill was not paid?"
They would call the school and see if they could gather the information. Yesterday I have a message on my answering machine, they called the school and the school told them the amount in box 2 is correct, that is what they were billed. Arrgghhh!!!
What did I ask?! I'm not calling back until tomorrow.
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Well, the client gets upset. They say, "well, it's all right there"(meaning form 1098T). Sometimes I don't know if they really don't understand the problem with the form, or they think I'm stupid.
I had one client bring one in with over $17,000 in box 2. I asked how much he had actually paid? He said it's right there in the box. I pointed out that there was also over $16,000 reported in scholarship/grants reported on the form. So, again, how much did he pay and what did he pay for? I guess he thought I would just say "Oh well, it has that much in box 2 so I will take that much for the credit. Duh........"Leave a comment:
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You may be expecting too much from this form (and the Federal beurocrats). If it flags the fact that there may be an educational credit or deduction available if you pursue your request for information from the taxpayer then it has served it's purpose...........Don't forget, the people that design these forms would not know a tax credit or deduction if it jumped up and bit them in the butt. It is up to "tax experts" like us to discern these facts.Leave a comment:
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Totally agree. And even with the account print out from the school, I find it difficult to see how the box 1 figure has been calculated --- often doesn't match the amounts billed on the account statement.
Add to that the fact that clients can't seem to wrap their brains around the notion that borrowed funds count towards the tax credit/deduction --- "I didn't pay anything for tuition last year" --- and this becomes one of my most challenging concepts to communicate with clients about.
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Can I just say.......
I think the 1098T is the MOST USELESS form the IRS has ever dreamed up.
The form always has the box #2 filled in. It reports the amt billed. But there is nothing in box #1 that reports the amt. actually paid. I make my clients bring me a print out from their school so I can accurately tell what they paid and what scholarships, etc they received.
Form 1098T. Thanks but no thanks.
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