<p>In 2009 i had a daughter and my wife going to school fulltime. In september of 2011 i received a letter from the IRS revoking the collage oppurtunity credits and wanting a reimbursment of $ 7,000.00. With our accountant involved it has been reduced to $ 2,300.00. I could never get an explanation from the IRS as to why until recently. In the last attempt to get this straightened out we sent them the 1098 T forms from all collages & University’s that had been attended. They would not respond to that latest information until i called them. There response was that since line 1 on the 1098 T form was not filled in that they were considered invalid and would not accept them. Has anyone had this problem? Myself and our accountant have never heard of such a thing. To back up a little, in 2009 we used Turbo Tax online to file our taxes. The program will not let yo move forward unless all is filled out correctly and it lets you know if there is a potential problem that could result in an audit. I would appreciate any advice on this matter. I contacted the schools and told them of the problem and said they are not required to fill out line 1, but the IRS told me differently they said it should be filled out and the schools are just being lazy.</p>
<p>Some schools fill out line 1 while others fill out line 2. It is assumed that the payments received for qualified educational expenses will be equal to the amount billed for qualified educational expenses.</p>
<p>Ds school fills out line 2- we haven’t had a problem- yet.</p>
<p>From the “Instructions for the Student” - IRS instructions for 1098T “Institutions may report EITHER payments received during the calendar year in box 1 OR amounts billed during the calendar year in box 2. The amount shown in box 1 or 2…”</p>
<p>In the “Instructions for Forms 1098 E and 1098T” p 3 states, “Box 1…IF YOU USE THIS METHOD of reporting…” and then “Box 2…IF YOU USE THIS METHOD of reporting…”</p>
<p>Best wishes on dealing with the IRS. My dealings with them have been similar to yours - they ignore/misinterpret their own rules.</p>
<p><a href=“http://www.irs.gov/pub/irs-pdf/i1098et.pdf[/url]”>http://www.irs.gov/pub/irs-pdf/i1098et.pdf</a></p>
<p>“My dealings with them have been similar to yours - they ignore/misinterpret their own rules.”</p>
<p>Me too. That’s one reason I suggest parents compare their payments to amounts on the 1098-T. At least YOU will know what you’re talking about!</p>
<p>Um, I just received a 1098-T in this morning’s mail. It’s wrong … almost laughably wrong.</p>
<p>DS’s school uses Box 2, the amount billed.</p>
<p>A potential problem if the school uses box 2:</p>
<p>In January of the freshman year, the school will report the billed amount (tuition and fees) for a full year – This is because the school usually bills the tutions and fees for the fall semester in August or July, and the billed amount for the spring semester in November or December before the fall semester is ended.</p>
<p>In January of the year after the student graduates, the school will report zero billed amount for the tax year that includes the spring semester of the senior year. If there is some scholarship from the school, 1098-T will show the received amount of scholarship (which is distributed in February or January of the spring semester for the spring semester’s scholarship) but 1098-T will not have any qualified education expenses billed in Box 2 for that year.</p>
<p>How can you resolve this problem?</p>
<p>I vaguely remember that some CCer recommended that we keep track of the actual expenses paid each calendar year. But how do we report the qualified education expenses in freshman year (for the education credit purpose)? Divide the amount in Box 2 by two? (And carry 1/2 of the billed amount in Box 2 on 1098-T each year forward to the next tax year? Are we allowed to do this?)</p>
<p>“But how do we report the qualified education expenses in freshman year?”</p>
<p>Keep the bills. Keep the checks/receipts. Claim only what you’re entitled to. Try not to think too badly about colleges that can’t generate appropriate tax documents. And do adhere to that old wheeze “Oh what taxable mess we weave when we take too seriously our 1098T’s.”</p>
<p>Our oldest’s school uses line 1, there isn’t even a line 2 on his 1098=T. I think that is “money collected”. I just did his taxes and they subtracted out his scholarships to calculate his “actual” amount. Is it possible that you doubled up on a number somewhere(didn’t subtract a scholarship or something)?</p>
<p>I found some answers to my question about claiming education credit or deduction in the year following the senior year, from another forum.</p>
<p>Newhope33 is right: “Keep the checks/receipts. Claim only what you’re entitled to” and more importantly, pay attention to the date you actually pay the qualified expenses. Do not read too much into the numbers shown on Box 2 of 1098T, which seem ro be useless.</p>
<p>I posted this info here in case it is useful to some CCers here:</p>
<p>Just got my 1098T for 2010. Expecting to see my Spring of 4th year tuition costs on there but no costs were listed just a little extra loan money I got that Spring. Reviewing the 2009 1098T, it became clear that they billed me for Spring 2010 costs in November of 2009 and therefore they were included on my 2009 1098t. Anybody have any advice on how to deal with this? </p>
<p>When were they paid? That’s what matters. If they were paid in 2010, you can claim them, if in 2009, you can’t.</p>
<p>1/2 were paid in 2009, and 1/2 were paid in 2010.
You can get a tax credit for tuition costs on top of your standard deduction. </p>
<p>There isn’t a refundable credit for education expenses, so there isn’t any way it will help someone who wouldn’t owe any taxes anyway. Where it becomes helpful is the year you graduate and start working, but unfortunately most schools have the due date for spring tuition some time in the december prior which screws it for everybody unless they somehow delay the loans funding (difficult to do) or if they are paying cash and somehow don’t pay until the next month (which wouldn’t be allowed at some schools. Whatever is paid in the december prior can’t be deducted in the next years taxes (or used for the education credit). No way around it unless you are willing to cheat on your taxes and pray your don’t get caught. It must help the school to do it the way they do, since it screws the student so much. Too late for the OP, but people about to start fourth year may want to look into trying to get a deferment for the tuition owed for spring so it is paid in the year you will graduate. </p>
<p>My wife works, and I have some side income so we have always benefited from the credit. I did pay approximately half of the tuition after the first of the year with cash, so looks like I can get some benefit from the credit after all.</p>
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<p>I think I need to clarify that the number in 1098T Box 2 is not completely useless.</p>
<p>It shows you what is billed for the tax year, say, 2010, which you may or may not need to pay all of them in 2010 (if the due day for this bill is January of 2011 instead of December 2010.) If you actually pay a part of the bill in January of 2011, it can be reported as education expenses paid in the tax year 2011. When you are audited by IRS, you can use the information in Box 2 to show IRS that you do have a bill to pay, although it is not paid before December 31, 2010 (and back this up with a dated receipt.)</p>