Form 1098-T

[RC]

My daughters both received Forms 1098-T from their colleges. Recently
divorced, I'm trying to save a few bucks and using Turbo Tax. Both of them
used student loans and financial aide from their schools to pay for college
tuition. Here is my quandary:

Daughter One graduated last May (2006) so her loans are due soon. Her 1098
has a zero amount in box 1 (payments received), $10,173 in box 2 (amounts
billed) and $4750 in box 5 (scholarships).

Daughter Two is currently in school. Her 1098T shows zero in all boxes
except Box 4 (adjustments for a prior year) which shows $12047.

Will they be able to take any of these as deductions or credits? Will Turbo
tax pick this up?

Thanks in advance for any input.
Rob

[Phil Marti]

"RC" <southwin...@hotmail.com> wrote:

> My daughters both received Forms 1098-T from their colleges. Recently
> divorced, I'm trying to save a few bucks and using Turbo Tax. Both of
> them used student loans and financial aide from their schools to pay for
> college tuition.

Ignore the 1098-T's, which are rarely useful. Even the IRS advises that you
work from your financial records of billings and payments rather than the
1098-T.

Download a copy of Publication 970 from www.irs.gov and get familiar with
the tax benefits from higher education expenses. Remember that expenses
paid from loan proceeds are treated the same as if they were paid from
savings.

Then come back if you have some specific things you can't figure out.

--
Phil Marti
Clarksburg, MD