Student loans + Tax form. WTF I hate the IRS?

[Meresgi]

Doing my taxes on turbo tax and I got to the education expenses sheet. Now I have the 1098-T from my college, with amount billed and grants filled in. I was wondering though, where do I/can I list the overall amount I took out to pay for the college in terms of loans as well as what I received in grants. I had to take out some loans to help pay for books, college supplies so it is more then what box 2 actually states. Is there somewhere I put this in? Do I just add the loan amount on top of what was billed?

[kuronosan]

They're supposed to disclude student loans as part of your grants/scholarships because you have to pay them back with interest.

What's become popular for a lot of schools to do is to report your student loans for the entire year, set your 1098-T to a per-semester basis, and then give you a 1098 that says you didn't pay any tuition and instead were given $x.xx back from grants/scholarships.

To break this down:

Fall Tuition: $10000
Spring Tuition: $12000
Financial Aid: $25000

What should be reported on your 2012 taxes:
Total Tuition Paid: $22000
Aid: $25000
$3000

What they actually do to you:
Fall + Spring: $22000
Aid (2011): $22000

On your 1098-T:
Total Tuition Paid: $0.00
Aid (Spring 2012): $3000

See what I'm getting at?

[Meresgi]

Ahh ok, I think I see what you're getting at. Trying to make sure I get as much back as I can through credits and what not. I wasn't sure if they required you to list the exact amount you took out in student loans for the college on the report (since it's only 1 semester on my 1098-T as I started in the Fall)

[Silenka]

Same vein question. I didn't do taxes this year (though i have grants and loans, I don't have a 1098-T form from my school, it's blank) because my dad seems to think I don't need to do taxes at all if I haven't worked this year or paid/received money in any sum over like 15 bucks. I think this is the case in Ohio but hmm, maybe I should have filed if I can get something back for being a student? I really don't know anything about taxes since I r teh financially dumb.

[hey]

You aren't required to file unless you made like $6000 or something (or $400 while self employed, for some reason), but it could be in your best interest to do so anyway.

[Meresgi]

It's anything under 9k if single and some other number if married, cant remember. I looked it up to see if it was worth filing state taxes as turbo tax charges for that shit. Apparently though you can file right on the state website.

[Silenka]

Thanks, that's about what I thought. I'm probably pretty unlikely to get anything back so I guess I just won't file this year.

[Greatguardian]

Did you pay actual money to go to school or was it covered completely by grants and loans and such? You'd be eligible for various tax credits based on how much money you paid towards tuition that may make filing worth it (though if you're under 24 your parents could just tack it onto their return and give you the money). I think a lot of those are disappearing next year though.

[kuronosan]

The Opportunity and Hope benefits are valid for another 1-2 years I believe. It's a good idea to claim them now, because you can only claim them for four tax seasons (two each).

[Zilong]

pretty sure you can claim the american hope or opportunity tax credit for a cool grand as long as you're in college.

[kuronosan]

pretty sure you can claim the american hope or opportunity tax credit for a cool grand as long as you're in college.

Up to $2500.

[Meresgi]

Up to $2500.

Really? I can only ever get $1000 for it max, not sure why, i'm guessing it's because I pay for college through grants/loans and not out of pocket.

[Silenka]

Mine is completely paid by grants and loans, nothing out of pocket. What is this free money you are talking about... o_o

[kuronosan]

From the IRS:

The American Opportunity Tax Credit modifies the existing Hope Credit for tax years 2009 and 2010 under ARRA. The credit was extended to apply for tax years 2011 and 2012 by the Tax Relief and Job Creation Act of 2010. The new credit makes the Hope Credit available to a broader range of taxpayers, including many with higher incomes and those who owe no tax. It also adds required course materials to the list of qualifying expenses and allows the credit to be claimed for four post-secondary education years instead of two. Many of those eligible will qualify for the maximum annual credit of $2,500 per student.

The full credit is available to individuals whose modified adjusted gross income is $80,000 or less, or $160,000 or less for married couples filing a joint return. The credit is phased out for taxpayers with incomes above these levels. These income limits are higher than under the existing Hope and Lifetime Learning Credits.

So you can still claim this year and next and get $2500 as long as you paid books/expenses/fees and attended school in that year.

I claimed it for two of my remaining undergrad years for $5000 towards my outrageous expenses while attending. It was helpful when my employer forgot to change my tax status when I graduated and I ended up underpaying tax by about $3000. Thanks to the Hope Credit and my final year of attendance, I only owed $500.

[Meresgi]

How did you max out on that Kuro? I just went through turbotax yesterday and only got the basic $1000. I'm guessing you made between a certain margin in income while at college? I made total $4k in the year of 2011 between going to school and lack of work, and paid around 4k for the year in tuition through grants+loans. Maybe turbotax fucked me over or something, though i'm not sure.

I only got $1000 last year as well when I claimed.

[Nesssie]

Silenka, If you used loans for any part of your tuition or books, you can take advantage of the American Oppurtunity tax credit.

http://www.irs.gov/newsroom/article/...211309,00.html

[Dolmen]

The American Opportunity Tax Credit is only partially refundable, so that's why you only received $1,000 back from it. 40% of the credit is refundable, up to a max of $1,000. So, you can have up to 40% of the $2,500 max returned to you, but to receive the rest you need to actually have tax liability which the remaining 60% will lower.

Regarding 1098-Ts, most universities completely screw them up. For instance, one of my clients finished school in December of 2011, paying tuition out of pocket. When she received her 1098-T it was a number no where remotely close to what she paid, and the check box for "box 1 or 2 including amounts for January through March 2012" was checked. Ultimately, as long as you hit $4,000 in expenses (including books), you're fine seeing as the AOTC covers 100% of the first $2,000, and 25% of the second $2,000.