1098t incorrect?

[gmack]

Hi folks,

Question about 1098t... A student's tuition for 2010 spring semester was $12,000. He gets grants totaling $5,500 and the taxpayer (parents) take out a loan for $5,000 ($10,000 loan in two disbursements - $5k for fall 2009 and $5k for spring 2010). Parents have a statement from lender indicating a disbursement of $5,000 to the school in January of 2010. The balance was paid in cash.

The student got a 2010 1098t showing $5,500 in Box 5 for grants but nothing in box 1 or 2. No other amounts are shown and no other boxes are checked except box 8 "at least half time student." I think the 1098t is incorrect but I don't know how much success they will have in getting it corrected. I asked them to get a "print out" of tuition and payments from the school.

I've searched through the 1098t threads and noticed that several members say they will ignore the 1098t amounts if the taxpayer has other documentation that contradicts those amounts.

Doesn't the IRS try to match 1098t amounts to form 8863? Does anyone have an idea why the $5k loan disbursement would not be included on the 1098t?

Thanks!

[dtlee]

I hate the way these things are used.

I would have them contact the school, but there may be a possibility that nothing in Box 1 or 2 is correct. I think the schools can choose to report in Box 1 (amounts paid) or Box 2 (amounts billed), but must use this consistently.

It sounds like your student was in the last year attending this school since you mention no fall expenses. Hence, if the final bill was sent in December of the prior year (or paid at that time), there may have been nothing paid or billed in 2010. If It was paid in December 2009 for the spring 2010 semester, it really counted for the 2009 tax year (not for 2010).

If it was paid in January 2010 but the school reports amounts billed and billed it in 2009, I think it would have been in the 2009 1098-T I don't think it matters when it was billed, but that is the IRS reporting requirement if the school chooses that method. The amount paid would be on the 2010 tax return in this situation.

The net of the above is that I have no idea how the IRS can properly reconcile the information with the documents they receive. You really need to have the taxpayer retain any and all information they can get about payments made and bills received (so that you can identify what the paymets were for).

There really needs to be a more straightforward process here.

[zeros]

Wish List

My wish list is that the government require that the schools furnish to the student the exact amount that the student/family paid toward the tuition for the year, including loans received direct. Nah, that will never happen.

[FEDUKE404]

Dreaming a bit?

My wish list is that the government require that the schools furnish to the student the exact amount that the student/family paid toward the tuition for the year, including loans received direct. Nah, that will never happen.

The goobermint is too busy making everyone fill out Forms 1099-MISC and rounding up more IRS agents to "monitor" the new health care plan.

(My guess is the IRS, like us tax folks, also knows the Form 1098-T is not worth the paper it is printed on......

FE

[solomon]

(My guess is the IRS, like us tax folks, also knows the Form 1098-T is not worth the paper it is printed on......

FE

Your are right.

http://www.treasury.gov/tigta/press/press_11192009.htm

[gmack]

This in fact was the students final year of school and, looking at the 2009 info, the school does use the tuition "billed" option for 1098t reporting. So I am guessing that the spring semester was billed in December 2009 and hence not included on the 2010 1098t. The $5,000 loan, and the remaining $1,500 cash were disbursed to the school in January 2010. My only concern is that, if the 1098t shows zero qualified tuition paid OR billed, this might raise a flag on a return claiming the 8863 credit.

[ChEAr$]

(My guess is the IRS, like us tax folks, also knows the Form 1098-T is not worth the paper it is printed on......

FE

Well, maybe not exactly. There are some preparers out there who won't put any education credit on the return without a form1098-T, so maybe that does cut out some dishonest taxpayers who might want to take an undeserved credit.

[dtlee]

Well, maybe not exactly. There are some preparers out there who won't put any education credit on the return without a form1098-T, so maybe that does cut out some dishonest taxpayers who might want to take an undeserved credit.

The 1098-T confirms whether the student is at least half time, gives the name of the school and the school's Tax ID. I need it in addition to the other documentation I receive, but I cannot use it alone.

[Davc]

You need to confirm the amount weren't used last year.