Track your tuition expenses for the most benefit under new rules
Tax Tip of the Week
October 10, 2016
Track your tuition expenses for the most benefit under new rules
Do you have the receipt for your fall semester tuition? Keeping track of your tuition and other qualified education costs may be more important than ever. That's because several laws enacted over the past few years, including the PATH Act from last December, made changes to the requirements for claiming education benefits such as the American Opportunity Credit. One change to note: In order to claim an education tax credit or deduction when you file your 2016 federal income tax return, you'll generally need a copy of the information statement sent by your school.
You may be familiar with Form 1098-T, Tuition Statement. If you're a student, you've probably received this information form from a college or other school. In the past, schools could choose to report amounts you actually paid or amounts that were billed to you. Beginning with your 2016 return, schools are generally required to report only the tuition and qualified expenses that you actually paid.
While the new reporting requirement may make claiming the credit easier, you'll still want to track your actual expenses. Why? In some cases, you may buy books and credit-eligible materials from a supplier other than your school. Those costs would not be on the Form 1098-T that you receive. To include the expenses in the calculation of your tax benefit, you need to have proof of your payments.
If you have questions about what costs are considered qualified educational expenses and how the rule changes will affect you, please contact us.
"Tax Tips" are published weekly to provide current tax information, tax-cutting suggestions, and tax reminders. If you would like more information on anything in "Tax Tips," or if you'd like to be on our mailing list to receive other tax information from time to time, please contact our office.
The tax information contained in this site is of a general nature and should not be acted upon in your specific situation without further details and/or professional assistance.
© MC 2016
October 10, 2016
Track your tuition expenses for the most benefit under new rules
Do you have the receipt for your fall semester tuition? Keeping track of your tuition and other qualified education costs may be more important than ever. That's because several laws enacted over the past few years, including the PATH Act from last December, made changes to the requirements for claiming education benefits such as the American Opportunity Credit. One change to note: In order to claim an education tax credit or deduction when you file your 2016 federal income tax return, you'll generally need a copy of the information statement sent by your school.
You may be familiar with Form 1098-T, Tuition Statement. If you're a student, you've probably received this information form from a college or other school. In the past, schools could choose to report amounts you actually paid or amounts that were billed to you. Beginning with your 2016 return, schools are generally required to report only the tuition and qualified expenses that you actually paid.
While the new reporting requirement may make claiming the credit easier, you'll still want to track your actual expenses. Why? In some cases, you may buy books and credit-eligible materials from a supplier other than your school. Those costs would not be on the Form 1098-T that you receive. To include the expenses in the calculation of your tax benefit, you need to have proof of your payments.
If you have questions about what costs are considered qualified educational expenses and how the rule changes will affect you, please contact us.
"Tax Tips" are published weekly to provide current tax information, tax-cutting suggestions, and tax reminders. If you would like more information on anything in "Tax Tips," or if you'd like to be on our mailing list to receive other tax information from time to time, please contact our office.
The tax information contained in this site is of a general nature and should not be acted upon in your specific situation without further details and/or professional assistance.
