I am filing using Turbo Tax online--the free version. And the part where you can make education deductions is confusing. It asks for your education related expenses. I have two 1098-Ts. On the first form Box 1 (payments recieved) has nothing and Box 2 (amounts billed) has $1300. The second form Box 1 has $5000 and Box 2 has nothing. They're the opposite. So what I did was I added up the Boxes 1 & 2 of both forms and used $6300 as my "education related expenses." (And then it subtracted scholarships and grants.) Since I did that I am getting an outrageous return that's too good to be true. Did I do right? So, I guess I'm asking if I'm supposed to add Boxes 1 & 2 together of 1098-T.
2007-02-19 18:21:42 · 6 answers · asked by Anonymous in Business & Finance ➔ Taxes ➔ United States
I have two 1098-Ts since I went to 2 different schools. Should I add Box 1 of the first form to Box 2 of the second form to get my education related expenses? What's the difference between "payments recieved" and "amounts billed?"
2007-02-19 18:51:55 · update #1
Box 1. Shows the total payments received from any source for qualified tuition
and related expenses less any related reimbursements or refunds.
Box 2. Shows the total amounts billed for qualified tuition and related
expenses less any related reductions in charges.
Yes you add the 2 together and you stated that you also subtracted the amount of scholarships and grants You did this correctly
Publication 970
http://www.irs.gov/publications/p970/index.html
2007-02-19 23:41:13 · answer #1 · answered by Anonymous · 1⤊ 1⤋
Generally, on the 1098 t, there is an explaination of the boxes, however, the amount of the deduction is dependant on if you are taking the Hope or the Lifetime credit (google search the difference). I think the hope allows a full credit, one time, and the lifetime works out as a precentage of you expense, each year thereafter.
Also, all you get to deduct is the tuition, fees, and some books. You do not get to write off all your expenses - fuel, vehicle expense, notebook paper (even if you charged them at the school bookstore, with your books) etc. So, be very careful about what you are trying to pull. Certianly you can not add them together. My guess is that
I would suggest finding out how much your tuition and related fees were for the last year, and simply using that amount...However, the only real problem is if you get audited - worst case you just have to pay them back.
the amount of your refund will change depending on your earned taxable income...if the education credit put you below a certian level, and you worked, you might have kicked in the earned income credit or something else...
2007-02-19 18:37:43 · answer #2 · answered by Anonymous · 1⤊ 0⤋
No, you should not add Box 1 and 2 from two different forms to get your expenses.
According to the first 1098T, no money was received by that school for qualified tuition and related expenses. According to the second, $5,000 was received. Your qualified expenses were $5,000 from the 1098T's.
How was the $5,000 funded? Did you receive a scholarship or grant? Did a third party pay it? Did you pay it through your own funds or a loan? The amounts you funded are what your credit or deduction is based upon.
2007-02-20 00:02:39 · answer #3 · answered by ninasgramma 7 · 0⤊ 1⤋
how much tuition did YOU actually pay in 2006? if its $5,000, then you should use this amount. You cannot claim a deduction or credit based on expenses paid with tax-free scholarship, fellowship, grant, etc.
2007-02-19 18:50:24 · answer #4 · answered by tma 6 · 0⤊ 1⤋
in case you itemize deductions on your tax returns, you are able to declare the pastime paid on pupil loans. yet once you're taking the general deduction, the letter potential not something. confer with a tax expert to be sure it quite is extra useful for you.
2016-12-17 14:23:10 · answer #5 · answered by ? 4 · 0⤊ 0⤋
I recommend consulting a tax expert to assist you with this issue!
All the best
2007-02-19 18:26:39 · answer #6 · answered by traderb550 3 · 1⤊ 2⤋