<p>As I was double and triple checking our tax returns and documents to make sure that I accounted for every penny (our EFC was borderline for a large grant) and didn't make any mistakes that would surprise us when we submitted my son's FAFSA, I discovered an interesting thing in the fine print on our 1098T. First, only billed amounts and scholarship amounts were reported. There was no information about paid amounts. BUT in the fine print it says this: </p>
<p>"Winter quarter amounts billed may not be reflected in the above numbers. (paraphrased)." </p>
<p>So a lightbulb goes off in my head. I had thought our tuition credits were not as high as they should have been when I did our taxes the first time, but I went with the info on the 1098. Knowing we paid in full for fall quarter, I initially reported the difference between the billed amount and scholarship/grant amount as the paid amount. </p>
<p>When I noticed that statement though, I pulled up my sons winter quarter account information. Sure enough, the winter quarter fees were billed in November and his FA was disbursed at the end of December. Tuition and fees for students on FA aren't due until the 2nd week in January. I paid the remaining balance around the due date and assumed that the the FA was disbursed around that time also. If I hadn't noticed that very fine print, it would not have occurred to me to verify that the info on the 1098 was complete. </p>
<p>The added information made a big difference in our tax credits. </p>
<p>If a school doesn't have to report actual amounts paid, what is the point of the 1098?</p>
<p>Maybe I’m not following this correctly, but the amount paid for the Winter Quarter in January, 2013, is not reported on your 2012 tax return. The amount billed and paid by FA in 2012 appears to be a “wash”, so it should have had no impact on your tax credits.</p>
<p>I am totally confused by the 1098 I received from my daughter’s college. It lists an amount in box 1 for the total payments received for qualified expenses that is pretty close to the actual dollar amount we paid in total for the calendar year. But, the amount we paid included tuition, room and board lumped together, but it would have been much higher had she not received a scholarship from the school. So, we can’t figure out why TurboTax is asking us to enter that amount, then subtract the scholarship from that. This makes it look like the scholarship covered more than tuition and that leaves my daughter having to pay tax on that part of the scholarship. But, the tuition alone is 31,000 and her scholarship was for 21,000, so obviously the scholarship covered tuition alone and none of room and board. The whole thing seems crazy to me.</p>
<p>Will TurboTax let you input your own figures instead of what is printed on the 1098t? That is what you would do if you were completing a paper form or the IRS website’s own Free Fillable Forms. See if you can do that to make it all work out.</p>
<p>Collegemom, we are going to amend our tax return so that I can enter correct amounts, rather than what was on the 1098T. I think at some point Turbo Tax asks if you got a 1098T. Maybe we can answer “no” to that and then just put in all of the accurate information. </p>
<p>I have printed copies of my son’s account information to keep in case of later audit.</p>
<p>OK…I understand now that we have to use our own records to come up with the tax info that is required. </p>
<p>What I am still wondering though is: What is the point? </p>
<p>I had assumed the 1098s were accurate, in the same way that my 1099s are.</p>
<p>I think that the 1098t does accurately record the information that it is required to record. However, that information does not correspond particularly well with the information that the taxpayers need to report. This is where we all end up so frustrated. The 1098t is not like a 1099. </p>
<p>Now as to why the 1098t firms are allowed to include charges that haven’t been paid yet, that is beyond me. Maybe the fine minds that designed the forms thought that most families paid a full year if tuition and fees up front.</p>
<p>In my case the 1098 included neither all tuition/fees charges that were billed, nor the amounts that were paid. Two quarters were billed/paid, while only the amounts for one quarter were reported.</p>
<p>Don’t ignore it.
You need to look at the Pub 970 and the instructions for form 8863.<br>
The college is allowed to report in several ways, their choice: what they billed vs scholarships/grants in that same period or what you paid versus that. They can use the academic year or calendar year. </p>
<p>The point is: only tuition and certain fees or addl costs are “eligible.” Based on total income, when free money is subtracted form the “eligible,” you may get money either taken off your tax amount or refunded. Or both.</p>
<p>oh, scholarships that were disbursed were only reported for one of the two quarters also. And, like I said, the form does say in the small print, that the amounts may not be accurate and you should consult your records.</p>
<p>Collegemom, the 1098T calculations are just calculations. If her eligible amount was 31 and her schoarships were 21, and if you income falls below a bar (a pretty high bar,) the formula is run, that’s that. The extra 10 is not added to some “taxble” pool.</p>
<p>OP, is your daughter a freshman? It is confusing the first time, depending on the 12 month period the school uses.</p>
<p>Income is part of the calculations done on the 1098T detail, when you do your taxes- not the 1098T itself. The income thing is to determine the tax benefits to you. Over a certain income formula and you may not get the full benefit of the credit/refund. </p>
<p>What’s confusing is how the schools can set the time period and billed vs paid. If you have doubts or think they missed a qtr, call FA. Also, if documented, you can add in costs for books and certain equipment the student won’t keep.
This is all easier (believe me, I’m as into details as anyone) if you run a sample 8863 and get some back-up info from pub 970 for 1098Ts.</p>
<p>Thanks. I have all the account statements I need, so I won’t bother calling FA. Regardless of how the schools set the time period, we are allowed to claim everything (tuition and books wise) that was paid in tax year 2012. </p>
<p>I had mistakenly thought I could rely on the 1098 for that info, but know now that is not the case. My original question was honest one predicated on that–if the 1098 doesn’t have to reflect actual totals (either amounts billed or paid in 2012, and scholarship/grant monies disbursed), then what is the point of the report?</p>
<p>I agree with you, ScubaSue. Ours have been useless and, worse, incorrect. The only point of the report is to let you know that you may have a deduction/credit coming. The danged school should just give out such notice instead of trying to get the amounts right as they have failed miserably for many in this regard. They should just let people know of some tax code cites and leave the rest up to the filers.</p>