If you have education-related expenses, you may be eligible for an education credit or deduction. Watch this video to learn more about Form 1098-T Tuition Statement and qualifying education expenses.
Hi, I'm Amir from TurboTax with some helpful information about IRS Form 1098-T.
If you or one of your dependents enrolled in school during the tax year, then you'll probably want to keep an eye out for a 1098-T form by January 31st. The 1098-T reports the amount of qualified education expenses paid by the student during the year.
The IRS does not consider every educational expense a qualified one, so it's important to get that information from your 1098-T. It will also help you calculate some of the tax benefits that the IRS offers, like the American Opportunity Tax Credit or the Lifetime Learning Credit.
Your 1098-T form will have a lot of useful information on it, but boxes 1, 2, 5 and 7 will be most important for your tax return.
- Box 1 reports all payments you've made to the school for qualified educational expenses.
- Box 2 reports the qualified education expenses that the school bills you for, which may not be the same total as box 1.
- Box 5 includes the scholarships and grants the school gave you. That's important because most scholarships and grants are tax free if you use the funds for school expenses. But the IRS will require you to reduce the amount of qualified educational expenses you claim for your credit.
- Finally, Box 7 will indicate if any of the payments you've made are for courses beginning in the first three months of the next tax year. You may be able claim that amount as a credit or deduction for the current year.
For more information about this and other tax topics, visit TurboTax.com.