<p>AAAARRRRGGGHHHH! I have been trying to get this stupid AOC credit right for days. How the blazes does the IRS expect mere mortals to understand this stuff? Although, at this point, I think my beef is more with TaxAct. I adjusted my 1098T to reflect the calendar year tuition (fall only). When I went over my figures, I found that I did NOT pay $4000 in qualified expenses. Okay, so far so good. I adjusted the scholarship money to claim what I paid. BUT, I do have several hundred dollars of book expenses I can add to my tuition expenses, but I cannot for the life of me figure out how to change the # on the form 8863. I can see the form when I go to review my taxes before filing, but it won’t let me change anything. I must be dense and not seeing something. Are there any TAXAct users that maybe know how to do this? I wouldn’t adjust my 1098T scholarships and grants down by the dollar amount spent on books, I would guess, because that does just not seem right. Yet, I can’t seem to add it to my qualified expenses, and dang it, they were a legitimate qualified expense. At this point, because it is only on the 25% part and would only be around $100, I’m almost ready to throw the towel in and just say forget about it.</p>
<p>So, is there anyone familiar with TaxAct who knows how/where I can add the books in?</p>
<p>Will TaxAct let you enter any of your figures manually? I’ve never used that program, but I do recall that TurboTax had an override feature when I used it years ago.</p>
<p>Since you are having to adjust so many numbers, you may be ahead to just print the forms that you need from [Internal</a> Revenue Service](<a href=“http://www.IRS.gov%5DInternal”>http://www.IRS.gov) and complete them by hand.</p>
<p>You should have seen a question prompting you to enter books, supplies, and any other qualified expenses. I would go back into the Q&A portion of the program and review the educational expense section. If necessary, I think you could just change the 1098 info to include those expenses. Alternatively, if you go into the Forms tab and pull up the 8863, you can likely just enter the figures manually. Obviously, you’re going to have to go through the alerts and all of that again. Please let me know if any of those ideas work out.</p>
<p>Under the Federal Q&A tab, click on the “Education” link, “college costs 1098”, and then “review” for whomever the student is.</p>
<p>Click “continue” until you get to the fill-in-the-blank page which says “Student Information - Education Expenses”. You put the books/materials amount in there, either under course materials required to be purchased from school (if enrollment dependent), or course materials not required to be purchased from school (most items). Click on the “learn more” link beside each blank if you aren’t sure in which spot to put your numbers.</p>
<p>This discussion is very long and I’ve tried to skim it for an answer to my issue, but I haven’t exactly found it; please excuse me if it has been discussed. Here it is:</p>
<p>My d’s college issued the 1098 form showing tuition cost for the whole 2011-2012 year and the value of the grant she got for the same time period. But she is a first year student, so in 2011 we paid half and she received half the amounts listed. I called the college and they said that’s how they report it and since I don’t file the form with my taxes, I can just write in the amount we paid for tuition (half of their statement). So first question–is this correct? Has anyone else had to deal with this situation.</p>
<h1>2 The grant d received was not specific to tuition or r&b. Can I just claim it paid for r&b and some of tuition for tax credit purposes? Is there some kind of income issue if we do? This whole thing is some confusing, and I have an accountant!</h1>
<p>Yes, you can just use the charges for the first semester and the expenses for the first semester.</p>
<p>Yes, if the grant is not specific, you can treat it in the way that is most beneficial for you.</p>
<p>So far this year, I’ve run the numbers for Happykid three different ways. It is a pain in the you-know-what, but now we know the most tax-advantaged option for us.</p>
<p>Course textbooks and materials that are specified in the syllabus as being necessary for the class - Happykid gets to claim the $50 dressmaker’s shears required for her costume design class. Everyday notebooks, ink, etc. don’t qualify.</p>
<p>Aha–finally figured out how to add the books in. Thanks to happymomof1, sk8rmom, and friedpasta. I tried all your suggestions, but nothing worked. Clicking forms would only bring the 1040 up for some reason. I could see the other forms when I reviewed my return, but at that point could not change any figures on them.</p>
<p>So, I did what friedpasta suggested. I had tried it yesterday, also, but got the same results–it would go to the 1098T but would not run any other questions. I swear I did this at LEAST twelve times between yesterday and today. So, in frustration, I decided to adjust the 1098T downward to account for the book costs, even though it didn’t “feel” right to me. But, I figured, if the worst happened and I were to be audited, I have records and receipts to back my numbers up. Well, wouldn’t you know it, once I changed the 1098T, the dang program DID go to the other questions about other qualified expenses, etc. So, I entered the books where they should have gone, went back and adjusted the 1098T upwards again, and my figures all align now. And the craziest thing is, every time i now go to the education section, it does go through all the other questions, whereas for the past day and a half, the program was skipping those questions. I don’t have any explanation for it at all. But, all is right with the world now. I’m probably just going to wait until tomorrow before I hit the final “submit” button. After all the problems I had getting those figures in correctly, I want to check it over again with fresh eyes tomorrow.</p>
<p>I’m sure the IRS won’t mind if you claim a smaller amount of expenses than reported on the 1098-T, but I’m not so sure they won’t mind if you report a smaller amount of income (scholarships/grants). Does anyone know for sure if it is ok to re-allocate grants to the calendar year for which they were used?</p>
<p>I agree, I’d like to see a reference that says college expenses and scholarships can have different treatment than everything else having to do with taxes. That is that income is reported in the tax year received and expenses are reported in the tax year paid, not when the income is earned or the expenses incurred. I’m also sure that the IRS wouldn’t object if expenses are under reported for tax year 2011, but I do think they would object when expenses paid in 2011 are reported next year for tax year 2012.</p>
<p>If the expense is billed in 2011 and paid in 2012, I think there is no problem with reporting that as a 2012 expense. But if a grant was disbursed in 2011 even if it was for spring 2012, I’m not convinced you can treat it as having been paid in 2012.</p>
<p>There are definitely examples where you can/should/must legally report something in a different year than it appears on a tax form. For example a business that does its accounting on a “cash” basis reports income in the year it was <em>received</em>. If I do some consulting in December and someone mails me a check on December 31, 2011 they will send me a 1099 including that income in 2011, but I will report that income in 2012, as I won’t receive it until early January. As long as I keep careful records and report all the income in the appropriate year, it’s fine that it doesn’t line up with the 1099. </p>
<p>However, for grant aid disbursed in 2011, even if “used” in 2012 toward 2012 expenses, I haven’t seen anything that convinces me that you’re allowed/expected to report that income in 2012 instead of 2011. I haven’t been able to find anything in publication 970 that clarifies this.</p>
<p>One thing to note: you don’t actually enter your 1098-T numbers anywhere on the form that actually gets submitted to the IRS. You just enter your net QEE after tax-free aid and refunds. That makes it much less likely that the IRS is going to notice and balk at any reasonable allocation that one does. (You enter the 1098-T numbers into your tax software to help the software figure out what it needs to actually enter on the form.)</p>
<p>The instructions for form 8863 state
</p>
<p>It doesn’t have anything to say about assistance received in 2010 for the QEE paid in 2011 (the equivalent situation of saving some assistance received in 2011 to use against 2012 expenses). But the way the whole section is written actually leads me to believe that they really do mean for you to line up the tax-free assistance with the expenses you paid in the same tax year. They are talking about “tax-free educational assistance for the qualified education expenses paid in 2011” which makes some sense to interpret as the scholarship and grant aid you got to help you pay for whatever qualified expenses you paid in 2011 (whenever you received the aid). Especially if you never “received” the aid, but it just discounted your expenses. </p>
<p>standard disclaimer: I’m not a lawyer or an accountant and I’m not giving anyone tax advice.</p>
<p>Grants from the college are taxable income to the student if they are not used to pay qualified education expenses which is basically tuition, fees, required textbooks. Grants used to pay for room and board and other expenses are taxable income to the student.</p>
<p>I received a 1098t for my son. We are in Texas. He started receiving his tuition waived from his fathers veterans benefits (Hazelwood). The 1098t has box 2 filled out. Since his tuition and fees are completely waived, I don’t think I can put anything down as actual amount paid to the school. His books are covered by DARS. I still had to pay part of his housing and meal plan for Spring 2011. He was in an apartment for Fall 2011. Thanks for any help.</p>
<p>I think you’re right…if all his qualified expenses are specifically paid/waived by those benefits, there are no out of pocket expenses that you need to put on your return since they’re all non-qualified.</p>
<p>From what I understand, you can use 529 money and still claim the AOC credit, what happens is the earnings on the 529 money that was used becomes taxable. Turbo tax does these calculations based on the statement you get from the 529 account. Only the pecentage of the earings used to calculate the AOC credit is taxed with no penalty.</p>
<p>I’ve looked through DS’ tax info and 1098T from his school, I read and re-read the information sheet that came with his 1098T from his school, I read and re-read all six pages of this thread and I think “Okay, I’ve GOT IT!” and then . . . I’m not so sure.</p>
<p>Problem is, I did DS’ tax return (he didn’t make much last year but did get a small - less than $300 - refund) and I did my and DH’s taxes; we got a large refund due to the AOC. Both tax refunds are already deposited in the checking account!</p>
<p>The day AFTER I filed our taxes is when the letter and the 1098T came from the school . . .</p>
<p>Now I’m afraid to touch any of the tax refund money. </p>
<p>However, after reviewing all the documents and this thread and everybody’s different scenarios, I think I am okay. The actual qualifying tuition and fees were MORE than what I reported using Turbo Tax. We got the full $2,500 AOC. So, I’m thinking the fact that we already got the full amount, even though I underestimated our qualifying expenses is not a problem. Once we hit the threshold to get the full $2,500, then it doesn’t really matter how much farther PAST the threshold we went . . . is this making any sense?</p>
<p>The same day, after I completed our tax returns, I also did the FAFSA for year 2 of DS’ college. Our EFC came out just about the same as it was last year at this time, for this current school year.</p>
<p>I wanted to go back over all the numbers to see if I needed to amend our tax return or amend the FAFSA, but I think I’m actually okay on both counts. Any opinions?</p>
<p>Thanks to all who have the patience to read and reply to all our cries for help! At this point, I think the only thing I need to do is go back into the FAFSA and make sure it said “have filed” taxes, not “will file.”</p>
At this point, I think the only thing I need to do is go back into the FAFSA and make sure it said “have filed” taxes, not “will file.”</p>