AOC More

[S T]

Hate to do this and start another thread, but seems like most of us have questions on this AOC Credit as well as some of the other Tuition Credits or Deductions.

I have a client, I believe I have it right, but just in case

The 1098T only showed amounts billed!
I was finally able to retrieve the Billed, Paid Transcripts online
My understanding is
College Bills for Spring - Fall - so only used 2011
Financial Aid was applied for and received and the funds were sent to the College
Then The Colllege or Financial Aid shows another entry for "Refunds" sent to the "Student/Parent"

In this particular scenario, I have an amount billed, which is $7,000,
I have payments of well over $ 10,000 from financial aid applied, but then I have refunds issued (College did not retain) of over $ 5,000

Net Tuition would be $ 5,000 - for AOC Tuition Portion
Parents/Student then provide me with an additional $2,000 books supplies, etc lis, that they paid.

So I do not have to concern myself of whatever the refund portion is correct?

I can show $ 5,000 for Tuition and $ 2,000 for Books/Supplies and whatever the parents/student spent the extra student loan money is no concern for Tax Purposes?

There just has to be an easier way to find out this information and track it for Tax Purposes

Thanks - I think I am venting!

Sandy

[BP.]

So I do not have to concern myself of whatever the refund portion is correct?

Probably not. This seems to happen with loan funds disbursed to the student after tuition/fees are paid. They can borrow for some "living expenses" too. The problem is, some people think that giving me loan disbursement records is helpful, but that doesn't alsways isolate out the tuition/fee amounts.

[Bonnie]

If the tuition was paid with financial aid, as you stated, there is no credit

[Jesse]

If the tuition was paid with financial aid, as you stated, there is no credit

I think the financial aid in this case is student loans required to be paid back at some point, not Grants.

I agree, there should be an easier way to find out this information and track it for Tax Purposes! I think you have it right Sandy.

[Bonnie]

Student loan payments do not normally show up on the 1099-T. I have found only amounts on there for scholarships and grants. Maybe colleges in your area prepare them differently. But anything paid with a loan is never on ones I get.

[BP.]

Student loan payments do not normally show up on the 1099-T. I have found only amounts on there for scholarships and grants. Maybe colleges in your area prepare them differently. But anything paid with a loan is never on ones I get.

1098-T Box 1- Payments from any source can be reported there. One source may be loan proceeds. "Financial aid" as a term doesn't help to distinguish free money from loan money.

[FEDUKE404]

However

1098-T Box 1- Payments from any source can be reported there. One source may be loan proceeds. "Financial aid" as a term doesn't help to distinguish free money from loan money.

I have NEVER seen a Form 1098-T with any entry in box 1 ("payments"). The qualifying expenses are always shown in box 2 ("billed"). Hence the usual confusion.

And one would think it would be quite difficult to characterize loan proceeds as "scholarships or grants" as reported in box 5.

OTOH, I am frequently uninformed.

Now back to my cave.....

FE

[dtlee]

I have NEVER seen a Form 1098-T with any entry in box 1 ("payments"). The qualifying expenses are always shown in box 2 ("billed"). Hence the usual confusion.

And one would think it would be quite difficult to characterize loan proceeds as "scholarships or grants" as reported in box 5.

OTOH, I am frequently uninformed.

Now back to my cave.....

FE

You bring up a good point. Nearly every college is reporting amounts billed and scholarships or grants received. The payments made may be totally different from the amounts billed.

I frequently have clients whose children were in their final semester getting these forms showing nothing paid or billed but scholarships received. Client records are all you can trust in these situations and sometimes we know that those are not in perfect order either.

[BP.]

And one would think it would be quite difficult to characterize loan proceeds as "scholarships or grants" as reported in box 5.

By instruction, box 5 amounts aren't included in box 1 amounts, so you're right about the difficulty in characterizing scholarship/grant funds as loan proceeds. Not sure how that would that even happen.

[Jesse]

Original Post:

The 1098T only showed amounts billed!
I was finally able to retrieve the Billed, Paid Transcripts online
~~~~~~~~
I read it as the "financial aid" - what I interpret to be loans - were on the transcripts not on the 1098T. Only the amount billed was on the 1098T. However, Sandy will need to clarify as she started the OP.

[S T]

1098T shows only Box 2 - amounts billed - Nothing in Box 5

Looking at the Account Activity, which provides date, Item, Term, Charge, Payment, Refund Columns.

It is showing "Fed Direct Loan, Unsubsidized 2, or Subsidized 1": and will credit a payment.

Will also show a FA Disbursement - Direct Deposit - and issued as a refund.

Sandy

[FEDUKE404]

An attempt to clarify

Original Post:

The 1098T only showed amounts billed!
I was finally able to retrieve the Billed, Paid Transcripts online
~~~~~~~~
I read it as the "financial aid" - what I interpret to be loans - were on the transcripts not on the 1098T. Only the amount billed was on the 1098T. However, Sandy will need to clarify as she started the OP.

I know from, ahem!, personal experience that loans will have no effect on anything shown on a Form 1098-T.

[ Insert low-level caveat here: If you ever stumble upon a Form 1098-T actually showing amounts paid, a second look might be necessary. ]

Let's take a simple NO-scholarship/grant situation: The "amounts billed" shown will stay the same whether those items were paid with cash, credit card, loan proceeds, oyster shells, or anything else.

And the reason the scholarship/grant amounts create headaches is they can frequently "cross" different time periods. Most schools "bill" the spring semester in late November/early December (and expect payment by the end of calendar year) but many scholarships are not "applied" until the following calendar year, hence appearing on the next-year Form 1098-T.

From my aforementioned personal experience, I would pay (most of) the spring semester billed amount (which shows up on year #1 Form 1098-T) around Christmas, the scholarship funds would appear in January (which shows up on year #2 Form 1098-T), and the difference would be used for any education tax credit considerations. Of course, for the calendar year including the senior spring semester, the Form 1098-T showed *zero* billed expenses, but did show an entry in the scholarship amount. On the surface, that might look like taxable income but in reality there was never any such thing.

Simple solution: Use your brain, get the actual facts, figure it all out, and just use the Form 1098-T to line your birdcage. (Review some of the "checked" boxes first, however.) The calculations are really quite simple, but without working with the actual real numbers you can speculate/discuss/be confused until the cows come home.

Now, back (again) to my cave......

FE

[Gary2]

I have - rarely - seen amounts paid instead of amounts billed. I've never seen a reason to question when that happens.

[S T]

Like to get this one behind me as the Client is a "PITA" and obtaining paperwork hours has more than exceeded what I can charge, as the client just doesn't "get it"

Jesse, Gary2, and others what do you think - If I have the Account Activity from the College, ( I literally signed in and accessed the Account with the Client's knowledge) No Scholarships, and the Fed Direct Loans less the Refunds - I should be good to go to use that amount for Tuition Paid. It certainly is about $2200 less then the Box 2 Amt Billed?


Sandy

[FEDUKE404]

Loan should not be a factor

Like to get this one behind me as the Client is a "PITA" and obtaining paperwork hours has more than exceeded what I can charge, as the client just doesn't "get it"

Jesse, Gary2, and others what do you think - If I have the Account Activity from the College, ( I literally signed in and accessed the Account with the Client's knowledge) No Scholarships, and the Fed Direct Loans less the Refunds - I should be good to go to use that amount for Tuition Paid. It certainly is about $2200 less then the Box 2 Amt Billed?


Sandy

Now I am a bit confused.

A loan is still a loan, and not a scholarship/grant. IF that is all you have (nothing in Box 5), then the client DID "pay" all of the qualifying education expenses shown on the Form 1098-T.

The only sticky question remaining is determining what amount was actually paid during the period 01/01/2011 through 12/31/2011.

BTW: What exactly is the source of the $2,200 difference?

FE