Incorrect 1098-t
Giuliana
No, you will not be penalized for not following what the Form 1098-T reports. You school might have reported your information incorrectly on the Form 1098-T. This often happens. You should report the actual amount of tuition you paid in 2020. In the program, you are allowed to make an adjustment under box 1. It is important to enter the actual amount of tuition expenses you paid. This allow the program to calculate your education tax break correctly on either a Form 8863 or Form 8917. Here are the steps to make adjustment on the Form 1098-T:
If you have paid qualified education expenses and meet certain requirements, you may qualify for an education tax break including the American Opportunity Tax Credit AOTC, Lifetime Learning Credit or Tuition & Fees deduction. To see if you qualify, here are the links:
Thank you! That relaxes me! I was also wondering, if the school charged me for fees in 2019, but financial aid and any of my payments were not applied until 2020 would I include those fees in my total paid as well? I believe that is the reason they placed my financial aid so high but kept my tuition so low.
The IRS does match information on filed returns with Forms 1098-T filed by the educational institutions, so you might get a notice. If you receive an IRS notice before you are able to amend your return, respond to them promptly, and you can provide the correct information instead of amending.
I am in a bit of a quarrel with the payment department of my school. They issued me a 1098-T Tax statement which I believe to be incorrect. However, I cannot seem to get them to understand that.
Here is the situation. I started attending University in the fall semester of 2021, paid for that semester in August 2021. I also paid for my spring 2022 semester in November 2021. Both payments were about $5880 each (total $11760).
Now the 1098-T tax statement states only $5880 in box 1. Which, in itself, is not a big deal even though I believe that to be wrong too. If I made the payment in 2021, it should reflect both payments on there, am I right?
What bothers me more though is the fact that they checked box 7 which indicates that "the amount in box 1 includes amounts for an academic period beginning in January-March 2022".
Now please correct me if I am wrong, but that would mean they reported the payment I made for my spring semester (which started this January) in box 1?
Ironically, they explained to me in an email, that they can only report payments made for tuition in 2021, which makes it even more questionable why they checked box 7. So either they forgot about the payment I made in August for the fall semester, or they should not have checked box 7
ALSO: I realize I can still file for the education credit even if the amount on my 1098-T is incorrect...I don't care whether I can a corrected form or not...I just want to understand the problem my school has...
The 1098-T is only an informational document. The numbers on it are not required to be entered onto your tax return. However receipt of a 1098-T frequently means you are either eligible for a tuition credit or deduction or possibly your student has taxable scholarship income.
You claim the tuition credit, or report scholarship income, based on your own financial records, not the 1098-T. In the 1098-T screen, click on the link "What if this is not what I paid the school" underneath box 1. You will then be able to enter the actual amounts paid. You will also reach a screen that allows you to adjust the scholarship amount for "amounts not awarded for 2020 expenses".
Thanks! I know that - as I said in my original post, this is not about how I am going to file it, it is about whether my school did a mistake on the form or not. Thanks though, I appreciate your reply!
No, they didn't make a mistake. That's just their understanding of how it should be done (which is wrong). But, it doesn't matter whether they made a mistake. You're not going to get them to correct it. There are a kazillion posts, in this forum, from frustrated parents who tried. I vaguely remember one parent succeeding. You just have to deal with it. It's so common, that TT has adjusted the input screens to accommodate (that took arm twisting too).
But, the modified 1098-T that you enter, in TurboTax, is not send to the IRS. Only the resultant calculations are sent (the credit you claim or the taxable scholarship you report). Essentially, the 1098-T is just an entry device.
Several tax benefits are available to help families meet the cost of postsecondary education. Two of those benefits are tax credits known as the Lifetime Learning Credit or the American Opportunity Credit (formerly named the Hope Lifetime Learning Credit). These tax credits directly reduce the amount of federal income tax owed. Seton Hall University has mailed the required Internal Revenue Service Form 1098-T (Tuition Payments Statement) to every student enrolled during the previous tax year to verify a student's enrollment for at least half time and/or as a graduate.
Seton Hall University cannot provide you with tax advice or assistance in determining whether you are eligible to claim a tax credit or how to claim a tax credit. To determine whether you, or the person who may claim you as a dependent, are eligible to claim either tax credit, please contact a tax professional or refer to IRS Publication 970 (Tax Benefits for Higher Education). If you need more information, please contact the IRS at 800-892-1040 or visit their website at -benefits-for-education-information-center
If I receive Form 1098-T, does it mean I qualify for the American Opportunity Credit or Lifetime Learning Tax Credits?
Not necessarily. The University is required to provide Form 1098-T to individuals for who qualified tuition and fees were received during the calendar year. Determination of eligibility is the responsibility of the taxpayer.
Is it possible to qualify for both the American Opportunity Credit and the Lifetime Learning Credits, and if so, may I choose which one I would like to claim?
Yes, a student may qualify for both the American Opportunity Credit and the Lifetime Learning Credits at the same time. However, the qualifying expenses are the basis for claiming the American Opportunity Credit or Lifetime Learning Credit, but not both. In general, students who qualify for both the American Opportunity Credit and the Lifetime Learning Credit may find the American Opportunity Credit to be more beneficial.
How do I determine which expenses will qualify for the American Opportunity Credit and Lifetime Learning Credits?
Each individual must determine which, if any, of the expenses paid may be used in the calculation of the education tax credits. Generally the only qualified expenses are tuition and fees for enrollment or attendance less the net of scholarships, grants, and VA benefits. Please note that any amounts paid for room and board, insurance, medical fees, transportation, and similar living expenses are not considered eligible. If you have additional questions regarding these qualifications please contact your tax preparer.
What is Form 1098-T (Tuition Payments Statement)?
Form 1098-T is sent in January to students at Seton Hall University for whom any financial activity has occurred during the last calendar year.
When will I receive my 1098-T?
All 1098-T's will be mailed by January 31st. If you did not receive yours, or if you require a duplicate, the best way to obtain a copy is online through Pirate Net.
How can I obtain a copy of the 1098-T?
The 1098-T's are available online through Pirate Net for viewing and printing. Log in to Pirate Net and click on the Profile & Finances tab, Make a payment, Select 1098-T under Statements section.
Why did I receive Form 1098-T?
Form 1098-T has been provided to assist in determining if you, or the individual who may claim you as a dependent, are eligible to claim an income tax credit on the previous year income tax return. You have received a 1098-T form if you have had any financial or registration activity at Seton Hall University.
The Tax Relief Act of 1997 states that educational institutions are required to file informational returns with the IRS indicating a student's enrollment, and report either amounts billed, OR payments received, for qualified tuition and related expenses. Seton Hall University has opted to provide the amounts billed information. The 1098-T form the student receives in the mail is the information that was sent to the IRS by Seton Hall University. The form is an informational return for your personal records, and is not required to be submitted with your tax return.
Why is Box 2 blank?
This box listed mandatory tuition and fees. As of January 1, 2019, the 1098-T no longer lists this information. The Internal Revenue Service's tax regulation indicates that all university's must now report payments, scholarships and grants posted to a student's account within the calendar year. Box 1 will report payments received and loans (whether private or federal) and box 5 will report scholarships and grants.