<p>I know this question has been asked to death, and when I Google it, I always find something similar but different so it's never actually answered. This is my first year filing too. But I digress.</p>
<p>So..my question is about taxes and 1098-T(s). Okie, dokie. I attended a community college last spring and I transferred to a university in the fall. I have always received financial aid to cover my education expenses and it has always exceeded those expenses, so I usually have what is considered taxable income left over. I didn't receive a 1098-T from my community college because my tuition/fees were waived by the financial aid. I DID receive a 1098-T from my university because they combined the billed amount for fall 2013 and spring 2014, which exceeded my financial aid for the fall semester. I have read about the inconsistencies of the 1098-T because not all schools have to report them based on certain exemptions (e.g., my community college) among other issues. So the taxable income that I would be reporting to the IRS would not match up with 1098-T form that my university submitted because I would be including the income from the community college plus I would be deducting the book expenses from the financial aid amount for fall 2013. </p>
<p>Is there any way I can report this information without being questioned? I'm assuming the IRS is aware of these discrepancies with the 1098-T, but really all you can do is make sure your butt is covered if they ask. I have all the tuition statements and credit card statements that help back up my numbers (given I didn't miscalculate anything <em>fingers crossed</em>). Also, neither my mom nor I qualify for any education credits because of the excess amount of financial aid. This is really just a matter of should I report the numbers I've calculated myself or go with the information from the 1098-T. My boyfriend's dad (got his CPA certification a number of years ago) advised me to not report the community college information because it wasn't reported to the government via 1098-T, so technically the money "doesn't exist". So, according to him, I'd only be reporting the university information. That didn't sit well with me though, so I'm turning to you guys for some advice!</p>
<p>Ok, If I’m understanding correctly, the fall school included billed amounts for spring 2014 in box 2. Then box 7 should be checked. I would be uncomfortable too following your boyfriend’s dad’s advice. You may not get caught but I don’t like messing with the IRS.</p>
<p>Was the CC for spring really a tuition/fee waiver? If so I don’t believe either the billed expenses or the amount of the waiver would be on the 1098T. But any excess finaid would be in box 5. If you just meant finaid covered tuition/fees then the amount would be included in both box 2 and 5.</p>
<p>If it were my kid, I would use the amounts from bills/account statements and receipts/records of payments to determine the taxable amount from spring. For the fall school, don’t include the amount billed for spring 2014, that’s why box 7 should be checked. When was your ‘free money’ finaid for spring 2014 credited to your account? Likely in January 2014.</p>
<p>The main purpose of the 1098T is to alert people that they may be eligible for an education credit. But because the IRS allows schools to report amounts billed rather than actually paid in the tax year, it’s a poor document for tax purposes. Go with your own records which it sounds like you have a good handle on.</p>
<p>Do not worry about your numbers not matching the 1098t. I don’t know anyone who ever has had numbers that matched. Use your own numbers. Save copies of your own printouts of the bursars’ statements wherever it is that you keep copies of your tax returns so you have them if anyone asks about this someday.</p>
<p>My kid’s numbers always match. But their schools bill for spring in January and credit scholarships/grants in January and we pay in January. That’s all it really takes to match.</p>
<p>Thanks so much for your replies. Yes, the information from the university on the 1098-T is correct. They combine the amount billed (fall 2013 and spring 2014), but they check off noting that it’s a combined amount and then they give me the finaid that was applied for the fall 2013 semester. That checks out just fine. The finaid for this semester was applied in January. </p>
<p>It’s the community college that I’m having trouble with. They have never sent me a 1098-T, but they send me emails explaining why they weren’t providing that information (see below). It could be one of these options:</p>
<p>— The qualifying tuition and fees you registered for in 2013 were entirely waived or paid entirely with scholarships, grants or VA payments.</p>
<p>— The qualifying tuition and fees you registered for in 2013 were covered by a formal billing arrangement with another institution, your employer or a governmental entity.</p>
<p>— The courses you enrolled in will not result in an academic credit.</p>
<p>— You have a nonresident or foreign residency status and did not have an individual tax identification number (ITIN) in our system at the time the forms were processed.</p>
<p>— Your registration activity occurred in a prior calendar year.</p>
<p>I’m not entirely sure which one it is though. The first one is possible because my tuition and fees were paid for by financial aid. Or it could be the last one because I registered for classes in 2012 (early registration). It’s definitely not the second, third, or fourth one. Either way, I have the tuition statements that provides the applied finaid and refund amount, so I’m able to calculate the tuition part. And then I’m able to take into account the cost of books so that I get my final taxable amount from the community college. Then I can combine that amount with the taxable amount from the university and apply that to the income section of my tax return. Are the chances low for the IRS to question this though? I mean, they’re getting their taxes out of it.</p>
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You’ll be ok as long as you have your documentation.</p>
<p>— The qualifying tuition and fees you registered for in 2013 were entirely waived or paid entirely with scholarships, grants or VA payments.</p>
<p>It’s this one. The instructions to institutions for the 1098T say they aren’t required to provide one under this circumstance. I think for the last one, when they say registration activity, they mean that everything occurred in December of the prior tax year, the billing of expenses and the crediting of scholarships/grants and nothing else happened in the tax year. It would mostly apply to students who graduate in May. It doesn’t have to do with registering for classes.</p>
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<p>I’ve read posts on this forum where people have received letters of inquiry from the IRS concerning this. But the people have had the doc to back up what they claimed and it didn’t go any further. The IRS does know that because billed info is allowed on the 1098T and because box 7 is checked that you may not be including all the amounts on the 1098T on your return.</p>
<p>Other than tuition/fee statements, will credit card statements and/or amazon orders that can be reflected on credit card statements for the textbooks be sufficient “proof” for them in case they decide to question it? Given this situation (one school didn’t send a 1098-T and the other one did), I guess I should have everything ready in the event that they do because it does seem questionable at least from their perspective. I just wouldn’t want them to inquire about one school and then find out that I didn’t submit information about the other school. </p>
<p>Yes, you need receipts or orders that show which books/supplies were purchased. Credit card statements generally don’t have that detail.</p>
<p>Then I may have to adjust the amount because some of the products were purchased online, such as software or online products used in the classes. If I can’t dig up the confirmation emails then I’ll have to adjust the costs. Now I know though for future reference…document everything!</p>
<p>On Amazon I can log in and look at an order I placed in 2006. On other sites you can probably do the same at least for last year. Then the credit card statement will show that you actually paid that amount to that organization.</p>
<p>Right, right. I understand that, however, there’s one book that I didn’t order online (I bought it at the college bookstore). I have the charge on the statement, but I may not have the receipt to correspond with it anymore. If I can’t find the receipt for it, I’ll adjust the amount information that I’ll be reporting to omit that purchase. Good news, all the other books for 2013 were ordered online through the college(s) and/or amazon so I have proof of those purchases. I wish they would make this whole process easier though.</p>
<p>Isn’t the old adage, if it were easy it wouldn’t be worth it or something like that? :)) </p>
<p>Something like that! Thank you so much for your help. I figure no matter what I do, I won’t know how it’ll turn out until I file the return. I figure it would still be best to be upfront about these expenses even if they decide to inquire about it!</p>