The annual tax-filing deadline can be stressful for college students and graduates. However, your tax preparer can assist you in seeing if you are eligible to take advantage of tax credits from your educational expenses.
In order to see if you qualify for these benefits, you must familiarize yourself with two key documents: the 1098-E Student Loan Interest Statement and the 1098-T Tuition Statement. Knowing what these forms are for and what to do with them is essential come tax time.
Tips for Understanding the 1098-E Form
First, we’ll begin by looking at five important things to know about the 1098-E form.
- What is the 1098-E form?
The 1098-E Student Loan Interest Statement is provided by your lender(s) either electronically or by mail and shows how much interest you have paid on your student loan(s). You will receive this form if you have paid interest of $600 or more for the tax year. The total amount of interest will be located in Box 1 of the 1098-E form. - What does the 1098-E form look like?
The Internal Revenue Service has sample copies of the 1098-E form available online, with information about all of the fields included on the form (such as the aforementioned Box 1 and 2) and provides instructions for borrowers and lenders. - What is the maximum student loan interest deduction?
The Internal Revenue Service has set the maximum interest deduction at $2,500 per tax year, regardless of how much interest you paid for the year. - When can’t I take the deduction?
There are stipulations that can impact your student loan interest deduction. You cannot take the deduction if your Modified Adjusted Gross Income (MAGI) falls under certain thresholds. Tax preparers should visit IRS Publication 970 for additional information.
If you have additional questions about your 1098-E form, you can contact your loan servicer. If you are not sure who your loan servicer is, you may contact the Federal Student Aid Information Center at 1-800-4-FED-AID (1-800-433-3243; TTY 1-800-730-8913).
Tips for Understanding the 1098-T Form
Now, here are five important things you need to know about your 1098-T form.
- What is the 1098-T form?
The 1098-T Tuition Statement reports expenses you paid for college tuition that might entitle you to an adjustment to income or a tax credit. The University of Arizona Global Campus is responsible for sending the 1098-T form to its students by January 31, with the Internal Revenue Service also receiving a copy. Students whose tuition and fees are entirely paid for by scholarships or through an employer or government entity, such as the Department of Veterans Affairs, may not receive a 1098-T form. - What expenses qualify?
Expenses such as tuition, books, and other fees that you paid during the year may qualify. Tax filers should visit the IRS Tax Tips website on information related to the tax credits available. - Can I access my 1098-T form online?
Yes. To download your 1098-T statement, log into your Student Portal and select “View 1098-T” under the “My Finances” heading. - What do the boxes on my 1098-T form mean?
The Internal Revenue Service has a helpful document to walk you through each of the 10 boxes on the 1098-T form. It covers everything from the total of what you paid for tuition and other expenses (Box 1) to your status as a graduate student (Box 9), if applicable. - Where do I enter my 1098-T information?
If you’re doing your taxes online, the company that you’re using will have a place for you to enter the information from your 1098-T form. After you’ve entered your qualifying expenses, you may be able to claim an education credit from the American Opportunity Tax Credit or the Lifetime Learning Credit. It is important to research all options before making a determination on your taxes.
If you have questions regarding your available tax incentives or how to input your 1098-E and/or 1098-T information, you should consult with a qualified tax professional or contact the Internal Revenue Service Taxpayer Assistance line at 1.800.829.1040.