<p>Does anybody know if the 1098T includes room & board?</p>
<p>I can’t believe my accountant is asking me that now, at 3:00 a.m. on April 15th.</p>
<p>Please respond asap if you know. Thanks.</p>
<p>No, it doesn’t…</p>
<p>D’s college was so kind as to include the amounts and categories they used to come up with the “Amounts billed for qualified tuition and related expenses” Box 2 number on the Form 1098T. They include Tuition, Student activity fee, and a health access fee fo each quarter.</p>
<p>No room and board…it’s not a related expense.</p>
<p>Thanks for your quick response, lmnop. Care to do some last-minute taxes for a complete stranger? :)</p>
<p>Kidding, kidding…NOT…no, really…</p>
<p>All kidding aside, if your accountant is asking you that question, regardless of the hour, he is not the accountant for you.</p>
<p>Our accountant is a magician , but he does consult with his partner when it comes to some of the financial aid stuff ;)</p>
<p>OP - There have been at least two CC threads over the past couple of months relating to problems with 1098T statements. It’s too late to confirm the amounts obviously … at least for your April 18th submittal. But you might want to check the 1098T statement against the actual amounts paid.</p>
<p>I had an accountant do our taxes for the first time this year because of one aspect of our return that I’d never dealt with before (not the education credits). The return was almost complete when I turned it over to the accountant except for the one item. I was told it would be ready in a few days. Four weeks later, I got a call and accountant said he’d asked a colleague to look at the education credits I’d claimed because he was confused and that’s why my return wasn’t ready yet! The other accountant initially didn’t get it either. I had to go in and sit down with the both of them and explain the numbers. I had already provided them all receipts and itemized everything that the 1098 numbers included along with all dates payments were made and scholarships/ grants were credited. They both did agree that my numbers were right. It’s rather unsettling that so many professionals are not up to speed on such a valuable tax credit.</p>
<p>Makes you wonder if they are up to speed on the things you don’t understand.</p>
<p>When looking for an accountant, make sure that you ask how many hours that they devote to tax law updates each year. CPAs have required training, but not all of them train on taxes. A lot of times, they are just pulling up the same pubs that you are reading the regs.</p>
<p>Yeah, I wonder how many accountants do tax preparation as a sideline to their “main business.” One of my brothers is happy with his tax accountant. But the rest of the family members have returned to doing their own taxes for the very reasons noted above. In my case, the accountant got later and later with the return. Exasperated with one April 13th delivery (“We’re very busy mid-March through mid-April”), I turned in all materials March 1st the next year … only to get the return back after 5:00 PM on April 15th! Goodbye Accountant.</p>
<p>Heyalb,
Jump over to the Financial Aid Forum. There is a very savvy bunch over there…the Kelsmom, Swimcats, Thumpers et al…</p>
<p><a href=“http://talk.collegeconfidential.com/financial-aid-scholarships/1077464-form-1098-t-fafsa-grants-question.html?highlight=1098[/url]”>http://talk.collegeconfidential.com/financial-aid-scholarships/1077464-form-1098-t-fafsa-grants-question.html?highlight=1098</a></p>
<p>I work in a CPA firm and they do pretty well with the tax implications of education expenses, but it is interesting how little they understand the financial aid application process. They have clients who want them to complete their kids’ FASFAs and CSS Profiles and they always seem very confused by them. (I usually end up answering those FA related questions and I’m no CPA. ;))</p>
<p>To be fair, if there was a way that the IRS could have designed 1098-T reporting that would have been less transparent and useful, I can’t imagine it. </p>
<p>Frankly, it is a disaster, and you can’t rely on the information in the 1098-T for much of anything unless your kid’s school magically happens to be one that has chosen to separate the wheat from the chaff, and eligible 2010 expenses from those billed for 2011 during calendar year 2010. And that’s darned few schools. </p>
<p>Accountants should know better --at least by now – but the IRS could have done us all a favor and set up rules that did a whole lot better at making the dang form useful in the first place.</p>
<p>Accountants are swamped this time of year. Be patient with who ever you are using. And you do not need to be a CPA to prepare tax returns. In fact, taxation issues are a small fraction of CPA exam questions. CPA are “public” accountants which basically means that they can sign an audit report expressing their opinions as to the fairness and completeness of information in accordance with GAAP. </p>
<p>The latter has nothing to do with tax compliance so one can be a great CPA and know very little about tax compliance. </p>
<p>Throw in the fact that GAAP is converging with International Financial Reporting Standards, basically what the rest of the world uses, and your CPA could be quite stressed out and tired all of the year not just in April. </p>
<p>I agree he or she shouldn’t be asking dumb question at the last minute but like I said be patient and gentle with your accountant. It is numbing how much an accountant is expected to know.</p>
<p>NewHope33 - I wonder if we have the same accountant (we’re both in CT). I turned in materials the end of Feb; we met with him 2 weeks later & reminded him of things that needed to be included in the return (including education credits); didn’t get a draft of the return until last week (after mutiple emails & phone calls); there were several omissions on the return (including those education credits); still had to wait another week til we got a corrected return (after DH made a nasty phone call).
Needless to say, we’ll be looking for somebody new.</p>
<p>[Publication</a> 970 (2010), Tax Benefits for Education](<a href=“Publication 970 (2022), Tax Benefits for Education | Internal Revenue Service”>Publication 970 (2022), Tax Benefits for Education | Internal Revenue Service)
This looks complicated, but if you follow it, it’s understandable. Only takes a few minutes to go through it.</p>
<p>One confusing point is that colleges can either include payments for the calendar year or the academic year. There’s a check box on the 1098T to indicate which they used. </p>
<p>To us, the right CPA relationship is more than handing over paperwork. We usually have a quick sitdown with him, to go over any unusual things that cropped up- we covered my 1098T concerns in a chat. This both assured me and gave him a heads up.</p>
<p>ps. many great CPAs are also working with businesses, many of which have a March 15 deadline for certain corporate reporting. Frankly, I don’t really kiow exactly what this is, but these clients take precedence over us. If we have questions, we speak with his #1 assistant. If we need a fast draft for starting finaid paperwork, we usually have no problem asking for- and getting- this. Communication is key.</p>
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<p>Our taxes are always very easy…whatever the income limitations are on any cool credit or deduction, we’ll always be on the wrong side of it! :(</p>
<p>Although this year, we’ll be selling some stock from an Employee Stock Purchase Plan purchased in dribs and drabs over the past 15 years. I’ve been researching it and creating XL spreadsheets for months…</p>
<p>Hi shellfell…</p>
<p>I tried sending you a pm, but it would not let me. Can you contact me by pm? Thanks-</p>
<p>I am waiting for the post office to close and the phone to stop ringing with questions clients should have asked weeks ago. I’ll take a shot at answering some of the posts.</p>
<p>Payroll returns are due Jan 31, farm returns are due Feb 28th and corporate returns are due March 15th. At certain points in time, due to those deadlines, the preparation of your return will be secondary to those even if got your info there first.</p>
<p>I’ve been doing this 26 years and there are certain things that seem to hold true across CPA firms. If your info is in order, you are friendly, it’s an easy return and you pay on time–then your return is going to tend to be prepared earlier than those in the opposite circumstances. Unfortunately, I have found a high correlation between the most demanding clients and those that don’t pay.</p>
<p>For those that feel they give their accountant the return “almost prepared”–in my view, this makes a return that much more difficult to prepare. The client thinks they have done all the work and wants charged accordingly. We start from the beginning with a blank screen no matter what. It takes a lot more time to figure our what a client did wrong, where they omitted something, etc. than to do it ourselves from the start.</p>
<p>Try to get all the info to your CPA in one go. Infomation dribbling in is a huge pain. The more often the preparer has to “go into” your return and work on it in bits and pieces, the more time it takes. There is also more risk of a piece of info getting lost when it doesn’t all come in together.</p>
<p>I have always tried to help clients with their FAFSA. However, before I personally had to complete PROFILE, i wouldn’t have been familiar with it. A CPA should know what every question on PROFILE means, but many of those questions (asset valuation, etc.) would need answered by the taxpayer. </p>
<p>Form 1098-T. They are rarely correct. Furthermore, if I ask the client what eligible expenses they actually paid, they can rarely answer. The knowledge of the average cc parent is nowhere close to that of the average taxpayer. On a good note, I haven’t yet seen the IRS question the amount claimed on the education credits :)</p>
<p>Regarding timeliness–I understand posters’ frustration with this. I try to be very diligent at keeping up and doing returns in the order in which they came in. I do not like to push deadlines, as it results in an increased tendency for mistakes. I have a firm deadline of April 1st to receive client info. The same people push the envelope every single year.</p>
<p>I do not know of any CPA firms that do taxes as a “sideline” to their main business. For most firms, tax season is the majority of revenue. Tax season is beyond overwhelming. The actual work and keeping up with the tax laws can be exhausting. Brains turn to mush after about 65 hrs/week. Most CPAs are working 7 days per week from Jan-April. Then payroll and property tax returns are due, so it doesn’t really slow down much until the end of May.</p>
<p>LookingForward & SrYrStress - Thank you for posting your views. It’s always helpful to hear from insiders.</p>
<p>Still, there’s something BIG missing in the Client-CPA relationship. Several of my family members share common business interests, and it’s not unusual for our individual CPAs to give three wildly different views on tax treatment … for the same transaction. We’re struggling with one issue right now … a very significant error was made at some time in the past (something along the lines of a fairly new Mercedes given a cost basis of $6). One accountant says “get an independent estimate of value and use that” and a second accountant says “I won’t use a fabricated number, so $6 it is.” We’ve also been told “yes I saw that this might cause you tax trouble, but I didn’t say anything because I assumed you knew that.”</p>
<p>Perhaps LookingForward is exactly on point … find a professional you communicate well with, and the majority of problems dissipate.</p>