1098 T box 2 tuition billed

[JenMO]

is tuition billed an amount to use for the education credit? If it isn't, and it's paid in 2013, will that amount show up on the 1098 t for 2013 as tuition paid?

[KBTS]

Each school does their 1098T differently. More than likely, they either use Box 1 for amounts paid or Box 2 for amounts billed - I have not seen a school switch from year to year. The form is pretty much useless, and many people here will tell you that. Your best bet is to have the student get a printout from the school showing the student's account with all the charges and payments. Explain this is the only way you can verify if they qualify for the credit and they should understand.

[FEDUKE404]

Billed is more common on Form 1098-T

There have been WAY too many posts on these boards re Form 1098-T. Perhaps do a search or two?

But to answer your question: Tuition "billed" is what most (all?) colleges use to report qualifying expenses. Maybe it is the easier way out for them? Never say never, but so far I've not seen ANY Form 1098-T with an entry in Box 1 ("payments received").

The education tax credits deal only with what was *PAID* during 2012. You need to delve further into your client's situation.

But I would seriously doubt if the college would report the same amount billed in two separate tax years, however.

FE

[S T]

Seems like the Education Instituions became "lazy" in about 2010 or so and switched to only showing the Amounts billed - not giving a breakdown on actual payments that either use to appear in Box 1 or on the reverse side.

As FE referred to - we had many conversations on the Board last year on this, - I am asking for all t/p claiming tuition to provide me with the "Account Billings - Paid or Transcripts" sometimes I just have to obtain their user sign in info to obtain, as they do not know how or what I am looking for.

The 1098T is a worthless document!

Sandy

[Bill Tubbs]

some report in Box 1

From what I've seen, those universities that don't have dorms do use Box 1, but any that have dorms are using Box 2. Which that does make some sense. Those that have dorms... is the payment received going to room/board or to pay for the tuition? The grants / scholarships / loans that come in don't specify what they're paying for and if the university arbitrarily assigned payments to room/board vs. tuition, that could run afoul of the ordering that some taxpayers would prefer.

Bill

[FEDUKE404]

Room and board ?

From what I've seen, those universities that don't have dorms do use Box 1, but any that have dorms are using Box 2. Which that does make some sense. Those that have dorms... is the payment received going to room/board or to pay for the tuition? The grants / scholarships / loans that come in don't specify what they're paying for and if the university arbitrarily assigned payments to room/board vs. tuition, that could run afoul of the ordering that some taxpayers would prefer.

Bill

I'm not quite sure what relevance "dorms" would have as (for purposes of education tax credits) room/board expenses are never "qualifying" in the first place.

Both Boxes 1 and 2 of Form 1098-T should only include "qualifying" expenses.

Are these institutions you mention, that place an amount in Box 1, community/technical colleges with only day students?????

Note to self: Start adding client surcharge for determining any education credits, similar to already established EIC pain and suffering charge.

FE

[WhiteOleander]

Today a client wanted to use the AOC but didn't receive a 1098T. Called Texas Tech Univ and inquired. They stated that the student's scholarships were more than tuition so they would not be issuing one. I looked at the instructions, and sure enough that's what it says. But, the problem is, the student has some book expense that is qualifying for the credit. We printed out the expenses from the school. But, since the school did not issue a 1098T, there is no notification to the IRS that the student is a half time student.

[FEDUKE404]

Expenses less than scholarship present problems

Today a client wanted to use the AOC but didn't receive a 1098T. Called Texas Tech Univ and inquired. They stated that the student's scholarships were more than tuition so they would not be issuing one. I looked at the instructions, and sure enough that's what it says. But, the problem is, the student has some book expense that is qualifying for the credit. We printed out the expenses from the school. But, since the school did not issue a 1098T, there is no notification to the IRS that the student is a half time student.

Another interesting scenario.

Sounds as if said student may well have some taxable scholarship income!!

FWIW: I have a client whose child is receiving a (very nice) "full" scholarship from a university in NC. The school has issued a Form 1098-T each year (don't know about 2012 yet), showing amounts in Box 2 and in Box 5. The amount in Box 5 exceeds the amount in Box 2. Taxable scholarship income has been reported on line 7 of Form 1040, with "SCH" notation printed on the line as required by IRS guidelines.

FE

[WhiteOleander]

Another interesting scenario.

Sounds as if said student may well have some taxable scholarship income!!

FWIW: I have a client whose child is receiving a (very nice) "full" scholarship from a university in NC. The school has issued a Form 1098-T each year (don't know about 2012 yet), showing amounts in Box 2 and in Box 5. The amount in Box 5 exceeds the amount in Box 2. Taxable scholarship income has been reported on line 7 of Form 1040, with "SCH" notation printed on the line as required by IRS guidelines.

FE

Yes, that issue has been discussed. If the school doesn't issue the 1098T, that could be hard for us to ascertain.

[taxea]

"The 1098T is a worthless document!" At least they are putting some info on it these days. I think the IRS got after them for leaving nearly every box empty. It is still far from adequate though.

[LCP]

I'm not quite sure what relevance "dorms" would have as (for purposes of education tax credits) room/board expenses are never "qualifying" in the first place.

Both Boxes 1 and 2 of Form 1098-T should only include "qualifying" expenses.


FE

I think it actually makes alot of sense...... how is the school to know whether payments are attributable to qualifying expenses or not when the billings include both and the full amount isn't paid?

[FEDUKE404]

Payments not really the issue here

I think it actually makes alot of sense...... how is the school to know whether payments are attributable to qualifying expenses or not when the billings include both and the full amount isn't paid?

Huh?

The bursar's job is mainly to be sure ALL of the student's bills are paid in a timely maner. I seriously doubt if the school keeps two accounts for each student, viz. a "qualifying expenses" account and a "non-qualifying expenses" account.

SIDE NOTE: I have seen instances where a school will "match", via scholarships or grants, only the "qualifying" expenses so as not to create a potentially taxable income scenario for the student. Loans will often appear for some of the remaining (non-qualifying) expenses.

OTOH, as others have noted, it IS of tremendous importance for the student (as well as his/her tax preparer) to have knowledge of WHICH expenses were actually qualifying and which were not. To a large part, the federal tax credits deal only with qualifying expenses as defined by the IRS.

How exactly, short of psychic powers and/or skills with a crystal ball, is the tax person to have knowledge of WHICH college expenses (regardless of the "billed"/"paid" issues on the Form 1098-T) to consider for income tax purposes if the school does not provide such information....normally through a Form 1098-T ??

FE

[Burke]

Seems like the Education Instituions became "lazy" in about 2010 or so and switched to only showing the Amounts billed - not giving a breakdown on actual payments that either use to appear in Box 1 or on the reverse side.
Sandy

Actually, originally they were required to put the amt pd on there, and they kicked up such a fuss that it was too onerous, that the IRS let them off the hook and said they didn't have to. So now, it is worthless -- and they still have to cough it up for us anyway. It's no big deal for most of them, since it is all in their computer records.

[taxea]

If the purpose of the 1098T is to provide information for tax purposes and the IRS backed down due to the alleged burden then whats the point of the schools even providing an inadequate 1098T. Seems to me that would be a waste of time and money for them too.

[LCP]

Huh?

The bursar's job is mainly to be sure ALL of the student's bills are paid in a timely maner. I seriously doubt if the school keeps two accounts for each student, viz. a "qualifying expenses" account and a "non-qualifying expenses" account.

SIDE NOTE: I have seen instances where a school will "match", via scholarships or grants, only the "qualifying" expenses so as not to create a potentially taxable income scenario for the student. Loans will often appear for some of the remaining (non-qualifying) expenses.

OTOH, as others have noted, it IS of tremendous importance for the student (as well as his/her tax preparer) to have knowledge of WHICH expenses were actually qualifying and which were not. To a large part, the federal tax credits deal only with qualifying expenses as defined by the IRS.

How exactly, short of psychic powers and/or skills with a crystal ball, is the tax person to have knowledge of WHICH college expenses (regardless of the "billed"/"paid" issues on the Form 1098-T) to consider for income tax purposes if the school does not provide such information....normally through a Form 1098-T ??

FE

What if payments are made in both December and January for the same term? Are there regulations in place for the school to attribute those payment to specific items on the bill?