I thought that the first 2000.00 of what you paid in QEE was given as the credit. This is what I have on our 1098-T
Line 2, amount billed 15,488
Line 5, Scholarships 11,704
We paid over 8,000 to the college this year (plus my daughters loans) however I only put that we paid 3784, which is the difference between the billed amount and scholarship, we are not claiming the scholarship as income so the 3784 is what is left over in QEE. When I put this amount in the tax software as paid education expenses, it gives us no education credits.
We do meet all the requirements to take the credit and we fall within the income range to take the credit as well.
When I answer all the questions, it says we qualify for all the credits, but when I put in the expenses paid (3784) that is when it knocks us out of getting the credit.
Where are you entering expenses paid? The credit should be figured already from the answers to what is in box 2 and 5. The only other thing I remember entering where book expenses.
The form does not list expenses paid, The only info on the 1098T is on line 2 and 5. After I enter that on the tax form it asks for Tuition and fees not on the 1098T that is where I am putting it , then a separate line for books
Box 2 is the billed expenses. Most software will ask for actual expenses paid which are the amount of what you paid and the posted scholarships. In your case, it should be 3784 + 11704 = 15488
Thanks, 4kidsdad, but I since I didn’t pay the scholarship I’m not sure why I would add that in to expenses paid, I though it was expenses payed by me? I paid out of pocket over 8000 plus my D loans but some of that was for room and board, this is why I only put 3748, which was the difference between billed ecpenses and the scholarship. I hope I am wrong but I don’t understand.
The billed expenses in box 2 do not include r&b and some fees that might not qualify for QEE. If you agree with that number, that that is the amount you paid for tuition and QEE billed by the school, use it. The other box is the amount of scholarships. It could be any number, $4000, $8350, $9999. It doesn’t matter unless it is over the billed amount (that you accepted as correct). You paid $8000 (plus any loan amount, which is the same as cash) because some of that was used for r&b. You could have paid $2000, or $5000 or all $15488. It’s not going to change the amount the school billed you, which is $15488. You didn’t pay the school more than $15488 for tuition.
If the tuition billed was $15488 and the scholarship was $15488, you wouldn’t get any AOTC even though you paid the college $8000 because the IRS would assume the entire $8000 was for r & b, and that’s not eligible for the AOTC.
Look at your billing statement from the college. What was the tuition and fees, what was the total of scholarships? If the tuition was about $15,000 and there were some fees, and the scholarships were about $11000, you are doing it correctly on taxes by just entering those numbers (plus you can add in the books). Assume the $8000 went to $4000 in tuition and $4000 in r&b.
Thank You! Starting to make a little more since. I looked at college bill for year. Tuition and fees do add up to 15488 and the scholarships are correct as well at 11704…
Went back to Tax questions and it ask for total amount of tuition and fees paid. So I should put the amount paid by scholarship plus the amount left that we paid toward the total billed, 15488?? which would equal to exactly the total on line 2, amount billed? I know this is what 4kidsdad said as well but just want to make sure this is also what twoinanddone means in your above explanation.
Yes, if your billing statement agrees with the numbers then the total tuition and fees billed and paid in 2015 is the amount in box 2 and the scholarships received the amount in box 5. Subtract box 5 from box 2 and you get the portion you paid for tuition, the scholarship paid part of it but since it is for tuition and fees which is a qualified expense, the scholarship is not taxable.
The only other qualified expense you have is books.
After sleeping on it and getting my head screwed back on from working on taxes 8 hours yesterday I think I finally realize that me putting in the total amount paid in the tax software as 15488 . That the software is doing the math for me, subtracting the amount of the scholarship, that leaves the 3784 that we paid and adding books to that we are getting back the full 2500 credit. Whew…Thanks to everyone for the input it really helped! And please, correct me if I’m wrong!!