Education Expenses

Did you or your dependent receive a Form 1098-T from the college or university? Before you enter the information into your tax return and take credits for that educational expense, you have to look at what is reported on that form. Most educational institutions will report the amount that was billed to the student and not report the actual amount received.

You cannot simply report what was billed and expect to take a credit against that. Sometimes, what was billed is not exactly what was paid. Other times, the amount billed was for a different year's semester than the tax year you are reporting. And finally, there are some expenses that were billed and paid for, but are not qualifying expenses.

If you are unsure of what amount you can actually use to calculate the credit, ask the bursar's office for a print-out of your (or your child's) financial statement for the tax year. Compare what is reported on the 1098-T with the receipt. Cross out any expenses that do not qualify and make sure that you take credit for only what was actually paid for the semesters that are allowed.

There are other qualifications that must be met, such as being at least a half-time enrolled student, for the American Opportunity Credit. Other qualifications apply depending upon the credit or expense deduction you are attempting to attain. A tax professional can be of help when you walk through the maze of accurately and completely applying the education credit tax laws.

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