Form 1098-T was first introduced in the Taxpayer Relief Act of 1997. This form’s purpose was to help the taxpayers so they could pay for their higher education. It used to have four boxes when it first started, which has changed significantly over the years.
With the advancement of technology, there has been the emergence of many new software’s. One of the popular software’s for tax preparation and filing is TurboTax which also provides the option of filing return forms. 1098-T is also on this list.
You have already seen an introduction to form 1098-T. In this blog, we will be discussing more 1098-T and sharing the process of how you can fill out the form in TurboTax. Let’s get started!
What Is Form 1098-T?
As we already mentioned, the form was introduced to support higher education. The “T” in 1098-T implies the tuition statement, which you can find in the IRS records. It is a report of eligible educational institutions in the US to maintain the record of due and receiving payments from the students.
Every eligible institution has to report a form giving data on enrolling students, their tuition, and other expenses. There are two copies of a single page. The red copy remains with the IRS, and the other copy is black, which remains with the student or as a record for the institution.
Over the years, there have been many revisions to this form in the years 2001, 2002, 2006, 2009, and 2016 and these revisions have led to development in the form.
How To File Form 1098-T In TurboTax?
You can enter the information of the form 1098-T on the mobile app of TurboTax by using the following steps:
- Sign in to the official app, which is available on the app stores of your mobile device (Google play store, App Store)
- Once you are signed in, select “Deductions and Credits.”
- Then go to the “Review/Edit” option
- Choose “Education” and then select the option “Expenses and Scholarships (Form 1098-T).”
- Finalize the form by filling out all the relevant fields.
You can enter the expenses in the form using the following steps.
Step 1: Open your returns or continue
Step 2: Find form 1098-T using the search bar in TurboTax.
Step 3: If you see the option with your education expenses summary, then select “edit” for the name of the student you want to enter the form 1098-T. Add the student’s name if the name is not on the list. Click on next and then edit the school name.
Step 4: If you come across the option “Do you want to enter your higher education expenses?”. Answer with Yes and select the option you want to continue. Answer “Yes” again if you have filed form 1098-T this year.
Step 5: You can either upload a digital copy of the form or fill in the information manually
You can follow similar steps to fill in the form information by logging in to the relevant TurboTax software on your desktop or online.
Read More:- What Is 8915-F In TurboTax? Ways To Fix Common 8915-F Issues
Eligibility Criteria For Filing 1098-T
As you already know, eligible educational institutions must file 1098-T for every student who enrolls and make transaction reports relevant to the records. However, even insurers can file this form when there are reimbursements or refunds of tuition expenses.
One other thing to note is that you don’t have to attach the tax returns for this form, and it is also not necessary to claim tuition and fees deduction. These decisions remain voluntary for those who qualify. Now, let’s look at the eligibility criteria for the 1098-T form.
The definition of what qualifies for an educational institution and the different tuition expenses that it includes is as follows:
Eligible Educational Institutions
Any college, university, or other postsecondary educational institution can qualify as long as it follows certain conditions, which are:
- If they admit those students who have a secondary school graduation certificate.
- Have legal authority with the state to provide postsecondary education
- Also, have recognition by a national accrediting agency or association
- Provides bachelor’s degree, associate degree, or any professional degree program
- Or, if they are a public or non-profit institution
Also, there are some programs that take part in the Department of Education’s student aid program. They are also eligible to qualify as educational institutions. It can include many accredited private postsecondary, public, and non-profit institutions.
Educational Expenses That The Form Can Include
The educational and tuition expenses that qualify include:
- School Fees
- Tuition
- Expenditure on course materials that are required to enroll in a class
Here are some of the expenses that are not included in the form:
- Unrequited course materials and books that are not a requirement for enrolling in a class
- Personal costs, board, room, transportation, living, medical insurance, and other similar expenses
- Processing fees and Application fees
- Expenditure on courses such as sports, games, or hobbies on the premise that they are not a part of any degree program. If they are a part of job skills training or degree programs, they can be subject to inclusion.
Exceptions
There are also situations where a student does not have to file the form 1098-T. These exceptions can include:
- Students who are also a non-resident
- Non-academic courses that do not offer any credits
- Students who are taking the aid of third parties in their tuition fees by signing a formal agreement.
- Students who have coverage of scholarships or a complete waiver in tuition fees.
Role Of Boxes In Form 1098-T
You must fill out certain requirements in form 1098-T for identification. These can be the name, phone, TIN, or any other relevant information. The information is filled out in what are called boxes, and each box serves a specific purpose. Let’s look at each box and see what purpose it serves.
Box 1
This box requires information to report tuition and other educational expenses a student pays during the calendar year. These expenses can sometimes also be called qualified education expenses.
Box 4
This box in form 1098-T reports the adjustments in the expenses that you mention in box 1 in the previous year. The amount can represent a reduction in tuition fees during a calendar year.
Box 5
Box 5 in form 1098-T reports an aggregate of scholarships or other grants the ASU and FASS administers and process during a calendar year. The following amounts are not included in Box 5:
- A tuition fee waiver that a student receives in a calendar year benefits ASU faculty or spouse, staff member, or spouse or ASU faculty dependent or member of staff.
- Work-study
- Scholarships, reimbursements, grants, or any similar aid are not processed or administered by ASU or FASS.
- Tuition waiver to a student of the research or teaching assistant/associate status.
- Student loans include PLUS, subsidized, unsubsidized, Perkins, or alternative loans.
Box 6
Box 6 is used to report adjustments to scholarships or grants reported in the previous year’s form 1098-T in Box-5. The amount that you report in Box 6 may affect the amount for any tuition fee deduction or education credits. However, the impact is only on the previous year’s grants.
Some extra boxes in the forms might have a checkmark on them. These boxes are 7, 8, and 9.
Box 7
If you check Box 7, it indicates that Box 1 includes an amount of the academic period of the next calendar year.
Box 8
This box indicates that you consider carrying half of the workload time for your course at ASU for at least one academic calendar year. Checking this box also makes you fulfill one of the requirements for the Hope Tax credit.
Box 9
This box is when you consider enrolling in a program that leads to a graduation degree or certificate. Those who enroll in a graduate program may qualify for tuition and fee deductions but are not eligible for American Opportunity credit. You may even qualify for lifetime learning credit.
Conclusion
Form 1098-T is a great option for those seeking aid in their postsecondary education. Also, with the addition of this form on TurboTax, filing this form has become easier and more convenient.
However, if you encounter any issues while filing this form on TurboTax, you might need a support service. You can rely on MWJ Consultancy for such support services. We have a team of professionals who can help resolve many issues in TurboTax. You can also look for support in other softwares as well such as Quicken, QuickBooks, etc.
You can contact one of our professionals by sending us a mail at info@mwjconsultancy.com or calling us at +1 877 469 0928. We strive to provide a quality and affordable support service to make you feel at ease.
Frequently Asked Questions
Any amount you pay for tuition or any other educational expense on the premise that you are an eligible student qualifies as an education expense. However, there is also a condition that you pay them for enrolling at an eligible educational institution.
There are many ways by which you can reduce the amount of income tax burden. You can start by investing in health insurance and applicable products under section 80 C. You can also claim a deduction on the Rent Allowance and Loan Interest for your home. Additionally, you can start contributing to charities for more tax benefits.