September is here and school is now in full swing around the country. Many post high school students as well as adults are returning to the college campuses. It is a busy time of getting tuition, fees, and books purchased and starting new routines. Now that these tuition payments are fresh in your mind, and prior to the end of the year, help yourself by organizing your 2015 education information prior to tax time. Come January, you should be receiving Form 1098-T from each educational institution attended, which you will need to compute your potential tax credits.
Recently, the IRS is starting to adjust or deny educational tax credits as a result of how colleges and universities are reporting tuition on the annual 1098-T forms. When you receive a 1098-T with an amount listed in Box 1 for tuition payments received, the IRS is relying on that information and filing is smooth. However, I am seeing more and more 1098-Ts with an amount in Box 2 for amounts billed for qualified tuition and fees. When the IRS receives this information, they are then looking to the taxpayer to be able to provide proof of tuition/fee payments by direct payment, loan payments, grants, etc. Going forward this will need to be provided to the IRS with the filed returns.
Therefore, while this topic is fresh in your mind, take the time to gather the following information for any dependent, yourself, or your spouse that is attending college on a part-time or full-time basis:
- Statements from the educational institution for any 2015 tuition assessed and detail of your payments made in 2015. Also include any required fees, books, as some credits allow for these expenses.
- Separate this information by each student in your household.
- Indicate if these expenses are for a student in their first four years of college.
May you all have a great start to the fall season!