1098-T how to claim?

Paying for College
1

<p>D filed taxes for about 2000. of earned income for 2012 now need to refile and include info from 1098-t. Can we her parents shift the 1098-T amounts to our tax return which we have not yet filed or must she refile and claim them herself? Should we use the amounts on the 1098-t or use actual amounts from the 2012 year based on bursars report, it looks like we can claim the amounts for Spring 2013 now even though we did not pay them until 2013 is this our choice or is there a rule?</p>

2

<p>If you’re asking about taxable scholarships/grants, that is your daughter’s income and she would have to report it.</p>

<p>If you’re asking about the AOC, only you can claim that if your daughter can be claimed as a dependent by you. 1098Ts are often inaccurate. Use the amounts from the bursar’s report and from your records of payment. You can only include amounts actually paid in 2012.</p>

<p>IRS Pub 970 has all the tax info concerning education:</p>

<p><a href=“http://www.irs.gov/pub/irs-pdf/p970.pdf[/url]”>http://www.irs.gov/pub/irs-pdf/p970.pdf&lt;/a&gt;&lt;/p&gt;

3

<p>If she is your dependent and the taxable part of her scholarships are less than $4000, consider just forgetting about it unless you get a letter from the IRS next year asking about it.

  1. The IRS does not have a good way to track taxable scholarships like they do income. Nor do they make it easy for folks to even figure out how to report it.
  2. Taxable scholarships are treated as earned income for dependents and the first $5950 of earned income is not taxable. So reporting an amount under $4000 would have made no difference in her refund. No harm, no foul.
  3. If the IRS does notice an error, they will often recalculate your tax return and send you a letter and bill. If they get it right (like a missing W-2), it is simpler and cheaper than filing an amendment.</p>
4

<p>For my son, it was beneficial to have him taxed for the scholarship to pay for non-qualified expenses (room and board), which allowed me a larger Education Tax Credit on my return. Son’s income was low enough that he did not owe taxes anyway.</p>

<p>You can’t declare her income on your return. Note: The 1098-T would only cause an income problem if the Scholarships/Grants were more than Tuition. Otherwise, there is no taxable income. The balance (tuition in excess of scholarships/grants) is what you are allowed to claim education credits for.</p>