Hi, I have a question I hope someone has dealt with here. My daughter is in UK for grad school, started September 2016. She got 50% scholarship. She realized doing her taxes, that she isn’t getting an 1098 from her university. Would just entering the expenses in US dollars and keeping her paperwork be enough? She’s read different scenarios online. She would get about 1000 more back if she claims tuition credit, so it’s not something she wants to forgo if possible.
Has anyone dealt with taxes and International schools?
There is a spreadsheet that you can download from the page linked above which lists all international universities which qualify.
I downloaded the spreadsheet and it does seem that most of the well-known universities in England are eligible – as well as many lesser-known universities. But your daughter should definitely begin by verifying that her university is eligible.
Beyond that I would think she would be fine if she retains documentation.
Yes, her university was on the list. She looked back when she went in college as part of study abroad. She just felt she needed a form, she remembers me with her twin sister, going through so many forms around tax time and aid renewal.
I will tell her to make sure she has copies of all the documents sent to her by her university.
When TT says amount paid, should she just put the amount she paid for the year, it wont be broken up the way it is on the 1098. Her tuition was about 20,000, she paid 10,000 with scholarship from school.
Actually, you can’t always rely on the 1098 T to be accurate either --sometimes because of the way the colleges do their accounting their statement doesn’t match up with the students as to amounts paid.
Because the maximum deduction is $4000 it often is a moot point given current college costs. That is, if your daughter’s costs for tuition were in the range of $10K… it doesn’t really matter the exact dollar amount or the exchange rate of British pounds to dollars – any way she does the math, she spent more than the $4000 max.
For documentation she should keep a copy of the billing statement from the university, in whatever form it was given to her.
thanks again, I let her know and she will copy and keep a file of her paperwork. I’m glad she could get it this year but I did notice a big difference when I lost my kids as deductions and their tuition costs, etc. But cheaper in other ways…so life goes on. I DON"T miss all the forms. ; )
calmom nailed it but, in my opinion, even without a 1098-t you can gather evidence of QEE online or even from your records and get the ed credits or deduction. You only need docs in the event of an audit so keep the docs but as far as claiming the credit you can enter the numbers on the schedules/software directly from tax documents or your records.
Just a clarification on terminology. IRS has a tendency to send out letters that say essentially something like this:
IRS: “We’ve decided there was a mistake on your return from last year and you owe more taxes. The mistake is because [specified income as not reported / specified deduction or credit not supported]. You owe $X. If you do not agree, send us a letter explaining why within 60 days.”
I get these letters at least once every 2 or 3 years. They are not the same as an “audit” - although I suppose if IRS disagreed with the response, it could give rise to an audit. But the way I have handled these letters is to send IRS the specific information and documentation I have. For example, one year I had student loan interest to deduct, but it was less than $600 so the lender had not issued a 1098-E – but they had provided me with a year end statement, so that was what was provided to IRS.
The problem has always gone away after I respond. That is, I send off my reply and about 3 months later get a letter from IRS saying I’m all clear. I’m self employed so that probably contributes the frequency of the problem, because sometimes the people who pay me fill out their 1099’s wrong - so income that is being reported on my schedule C looks to IRS like it belongs somewhere else.
I was audited once and the process was different – it was notice that told me I had to go to the IRS office at a specific day and time and bring all my records with me.
In terms of net result, it doesn’t matter. Bottom line the documentation is only needed if IRS asks for it. But I just want to clarify that IRS probably sends out letters asking for info with far greater frequency than they undertake audits.
Calmom, I shouldn’t have said audit, it’s gotten so people use that when they get the letters that come out usually 2 years later, but a true audit is more painful. When someone I work with got a note saying he owed under 200 more from something, he didn’t fight it, just felt it was easier to send a check. His call but if you have the paperwork available, send it.
I got a letter when Yale wouldn’t change a form they gave my daughter for study abroad in the summer. It was a 1099 and they wanted taxes but her scholarship wasn’t taxed. It went on and on and I was surprised they wouldn’t change the form. They gave the correct one for study abroad during the year. IRS understood but said they couldn’t accept that form except as it was, not what it was supposed to be. I admit, I got tired of fighting and my daughter calling, and just paid it. An agent did say it wasn’t isolated and they were tightening rules on using 1099 misc forms with colleges. If they have, I don’t know.