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1098-T

Technical topics regarding tax preparation.
#1
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Hallelujah!!! Box 1 is now being used! I have only had a few of these so far this year, but have received the transcripts of charges and payments to the student account and so far they are tying out to the box 1 figure.

Anyone seeing any further due diligence still needed on this or any possible traps?? Seems like it should be easy now on this credit..... waiting for the other shoe to drop.

Thanks!
 

#2
EZTAX  
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We are also giving thanks in our office after so many years of headaches regarding the box 2 reporting.

At a seminar I went to, they said 1098 T forms would not have to be sent out if all tuition was paid with a scholarship. The two we have seen did report the taxable scholarship amounts.

I was thinking about this last night and my concern is that I think taxable scholarships (depending on the details and amounts) are considered unearned income subject to kiddie tax. (That is so wrong!). With the new kiddie tax rates that might be quite the shock for some.
 

#3
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Have not yet had one where scholarships paid the entire thing. I would think they would still issue a 1098T with the scholarship number amount on it and box 1 will be zero. Then we will need to go back to the way we have been doing it.....get the transcripts and go from there.

Luckily that situation is more infrequent ..at least for me! I am still over the moon at the box 1.
 

#4
JR1  
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Oh Hallelujah in waiting....will have to review those transcripts, but it's about freakin' time. They have access to the very same info we do when we get the accounts!!! Why can't they put the number there?
Go Blackhawks! Go Pack Go!
Remembering our son, Ben Jan 22, 1992 to Aug 26, 2011.
For FB'ers: https://www.facebook.com/groups/BenRoberts/
 

#5
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JR1 wrote:Oh Hallelujah in waiting....will have to review those transcripts, but it's about freakin' time. They have access to the very same info we do when we get the accounts!!! Why can't they put the number there?


Agree.
 

#6
CathysTaxes  
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JR1 wrote:Oh Hallelujah in waiting....will have to review those transcripts, but it's about freakin' time. They have access to the very same info we do when we get the accounts!!! Why can't they put the number there?

Higher education at its finest.
Cathy
CathysTaxes
 

#7
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Still having 1098-T problems. Some colleges are not sending 1098-Ts when $0 in box 1. They insist it is not required. ...but Pell Grants.
 

#8
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I just reviewed a 1098-T (pulled from the student's online account) which had $60 in box 1.

On another screen, the account showed a cash payment of $2,798 on 1/18/18 for the spring 2018 semester. This student did not receive any grants, scholarships, or loans. The student completed the spring semester and no amounts were refunded. While I realize that perhaps not all of this $2,798 payment was for qualified expenses, this is our local community college and I know for a fact that tuition per semester is over $2k. I did not investigate further as at this point I realized that the client's income this year was well over the income limits for the credit.

I am not sure that figuring these credits correctly will be any easier this year.
 

#9
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I just had a similar experience to Trailman.

1,000 payments received in box 1
1,750 scholarships and grants

Upon review of the account history, total tuition was about 6,000 and my client has bank records showing payments of about 4,000. Local community college, no refunds were made. These forms are still going to be completely unreliable unless it's from a university charging 20,000 and student only receives 10,000 of help. If there isn't a 10,000 spread or more I'm still going to be asking for bursar's account transcript.
 

#10
jon  
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From a man who went through as far as an MBA - institutions for higher learning have said that box 1 was to difficult for them to compute (why??), and now what 10 years later they were supposed to not have a choice for the 10th time, and I am sure as far as they are concerned it is right??? I have been trying to figure who they are responsible to- they have succeeded in becoming a producer of a gigantic amount of diplomas which means they must be successful - and do not bother them!!!
 

#11
Bell  
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I just did a 1098 T that matched perfectly to the Fall 2018 Tuition. Both Fall 2018 and Spring 2019 were billed and paid in 2018, however the 1098-T only shows the fall semester. The box 7 is checked that indicates that it includes amounts for January thru March 2019. But, clearly.......the 2019 tuition is not included. Should the TP ask for a corrected 1098 T or should I move forward. I have enough expenses to clear the 1099-Q.
 

#12
makbo  
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jon wrote: institutions for higher learning have said that box 1 was to difficult for them to compute (why??)

In fairness, some schools never had a problem filling out Box 1 correctly, well before it was mandated. Just like individual taxpayers, some are honest and diligent about their responsibilities, others are lazy and sloppy and will try to get away with whatever they can.
 

#13
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Had a student graduate in May of 2018 from a large state university in New England. Parents income was always over the limit to claim the AOC. I told the parents to make sure to make the spring 2018 payments in January of 2018 because then the student might get some benefit from the AOC in 2018. Parents still paid spring tuition in December 2017.

I figured the student probably paid for the books in 2018 so I asked her to get the 2018 1098 T off the school website. Only had 2014-2017. I am guessing the school is going to say they did not need to issue a 1098-T for 2018 because payments were zero. But the student was enrolled full time and graduated in 2018. Shouldn't they issue one just to check the box and let the IRS the student was enrolled? I can still get a dollar for dollar credit on the books and fees paid in 2018
 

#14
jon  
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If colleges could always do box 1 correctly why did they tell authorities they could not? I agree with you they can do and it should match their records - differences are up to the taxpayer and whoever they need to reconcile amounts. I think it would be easy, but it obviously was not going to happen for them, per them.
 

#15
Joan TB  
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See page 9 of Pub 970 for what to do when you don't get a 1098-T but are still eligible for AOC.
 

#16
JR1  
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I got two in today with amounts in box 1. Haven't looked to see if they're correct.
Go Blackhawks! Go Pack Go!
Remembering our son, Ben Jan 22, 1992 to Aug 26, 2011.
For FB'ers: https://www.facebook.com/groups/BenRoberts/
 

#17
makbo  
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BerkshireCPA wrote: I am guessing the school is going to say they did not need to issue a 1098-T for 2018 because payments were zero. But the student was enrolled full time and graduated in 2018. Shouldn't they issue one just to check the box and let the IRS the student was enrolled?

No.

Joan TB wrote:See page 9 of Pub 970 for what to do when you don't get a 1098-T but are still eligible for AOC.

That is not a general "free pass", it only applies in the very rare situations where the education institution is not required to issue a 1098-T but tuition was still paid. In the BerkshireCPA example (not sure if you were responding to that), the 1098-T is irrelevant to the educational expenses potentially being claimed.
 

#18
JR1  
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Update: So far, box 1's are matching actual payments!!!!
Go Blackhawks! Go Pack Go!
Remembering our son, Ben Jan 22, 1992 to Aug 26, 2011.
For FB'ers: https://www.facebook.com/groups/BenRoberts/
 

#19
EZTAX  
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Just talked to a person responsible for the 1098T forms at our local community college (California). He explained that when a student receives a BOG grant (Board of Governors) it is actually a fee waiver so that is why box 1 only contains misc fees and not the tuition amount.

Bummer since I was hoping to report taxable scholarship and take tuition for AOC credit.
 

#20
Joan TB  
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EZTAX - Yeah, you always gotta know about whether the scholarship is allowed to be used on anything other than tuition/fees. If not, you can't do the "taxable/AOC" dance.
 

#21
EZTAX  
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Agree Joan - but I really like that dance! It is one of our "hero moves".
 

#22
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Must be lucky so far. Because of the past requirements for account transcripts, my clients are still including them this year. So far batting 1000 on pmts matching the box 1 amounts. Only had maybe 15-20 so far though.
 

#23
Riki_EA  
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We are finding that they aren't always tying out correctly to Box 1 when there are scholarships and/or direct 529 payments. For at least one we've seen, they seem to be excluding the scholarship amount from the Box 1 total, while still printing it in Box 5, scholarships. For example, a full paid scholarship might show $0 in box 1 and $12,000 in Box 5, leading the software to spit out $12,000 in taxable scholarships when it should be zero - the scholarship paid the $12,000 tuition.

Of my two kids, one ties out to the penny, and the other doesn't tie out at all, and since there is no detail, I don't know how they computed the number. I will adjust to my records. Another preparer saw a situation where the direct 529 payments were not included in the Box 1 total. So, we are still asking for bursar's statements if the Box 1 amount is critical.
 

#24
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kbairtax wrote:Must be lucky so far. Because of the past requirements for account transcripts, my clients are still including them this year. So far batting 1000 on pmts matching the box 1 amounts. Only had maybe 15-20 so far though.


To date, 4 out of 5 box 1 amounts that I have seen are clearly incorrect.

Today it was a SUNY school. Box 1 contained EVERYTHING the student was billed (all billed amounts were paid) with one adjustment (negative) for the amount of SUNY tuition credit. Yes, that means they included room, board, etc. The transcripts clearly show this. On this one I am allocating the PELL grant to living expenses (and therefore taxable to the student) in order to qualify the client for some (most) of the AOC.

Another SUNY school I have appears to have box 1 correct, though I can't spend the time reconciling the approximately 175 line items on the transcript that all pertain to the 2018 amounts paid. I did total the tuition only amounts to just about 7k and the box 1 shows 8k so I imagine this one might be correct.
 

#25
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Huh....I did not look back but I know at least 3-4 of the ones I did were SUNY schools. They tied out to just the tuition payments....nothing in box 1 for room and board. Have not yet had any with 529 plan payments, but will watch for that. I did not give it a thought but now that you mention it, the school will not know where that money came from if it was not paid directly to them from the plan.

heavy sigh.......I guess I got excited WAY too early in the game.
 


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