IRS Form 1098-T: Complete Guide to Education Tax Benefits
Important: Form 1098-T helps taxpayers claim valuable education credits, but amounts shown may not match what you can actually claim. Always verify with payment records.
Understanding Your 1098-T
Educational institutions provide this form to help students claim education tax benefits.
Key Boxes Explained:
- Box 1: Payments received for qualified tuition and related expenses
- Box 2: Amounts billed for qualified tuition (if institution reports amounts billed)
- Box 4: Adjustments to prior year charges
- Box 5: Scholarships/grants (including Pell grants)
- Box 6: Adjustments to prior year scholarships
- Box 7: Check if amounts in Box 1 include amounts for academic period beginning Jan-March
- Box 8: Check if student is at least half-time
- Box 9: Check if student is a graduate student
Who Receives This Form?
You should receive Form 1098-T if you:
- Were enrolled in an eligible educational institution
- Had qualified tuition and related expenses
- Are potentially eligible for education tax benefits
- Meet the institution's reporting requirements
Note: Some students may not receive a 1098-T but can still qualify for education benefits.
Education Tax Benefits Available
American Opportunity Credit (AOTC)
- Up to $2,500 credit per student
- First 4 years of post-secondary education
- 40% may be refundable
- Course materials qualify
Lifetime Learning Credit (LLC)
- Up to $2,000 credit per return
- No limit on years of study
- Includes graduate courses
- Non-degree courses may qualify
Tuition and Fees Deduction
- Up to $4,000 above-the-line deduction
- Expired but may be extended
- Check current year status
How to Claim Education Benefits
- Gather documentation:
- Form 1098-T from school
- Receipts for books and supplies
- Records of payments made
- Complete Form 8863:
- Part I for AOTC
- Part II for LLC
- Transfer amounts to Form 1040
- Keep all records for 3 years after filing
Common Issues & Solutions
- Box 1 vs Box 2: Institutions report differently - use what matches your payments
- Missing books/supplies: Can add $600-1,200 to qualified expenses
- Scholarship coordination: Only count amounts applied to tuition
- Academic period timing: Payments for Jan-March may apply to either year
- No 1098-T received: You can still claim credits with payment records
Maximize Your Education Tax Benefits
Education credits can save you thousands - don't miss out!
Our Education Tax Services Include:
- AOTC/LLC optimization
- Scholarship tax analysis
- Student loan interest deduction
- Coverdell/529 plan coordination
- Graduate student tax planning
Call 972-519-0041 today for a free education tax consultation