How to Claim College Tuition on Your 2014 Income Tax Return

Clients often ask about about how to claim college tuition on their tax returns. The subject is confusing. There’s the American Opportunity Tax Credit and the Lifetime Learning Credit, and finally the Tuition Deduction.
How do you know which one is applies to your family’s situation?
The forms you receive from the college or university can make the situation even more confusing. Sometime in January, you should receive a Form 1098-T from US colleges; the form reports college tuition paid to the school. Unfortunately, the information reported by the school on the 1098 is not always reliable as far as the data needed to prepare an accurate return and keep you out of trouble with the IRS. The reason for this is that  the 1098-T typically reports totals for the school year (ie., Sept thru August). However, the IRS is looking for than calendar year totals (ie., Jan through Dec).
My recommendation is that you request from the college’s finance office a statement of account for the calendar year 2014. The statement will show all tuition, fees, payments made, loans, grants, scholarships… everything.  From this statement you can determine an  accurate amount paid for tuition and other deductible fees.

One final note: If you have a son or daughter at college, have them contact the finance office to request the form, which the college will often email to the student. In some cases the student can actually go online and print a copy of the statement. However, and this is important, colleges typically will not respond to a request from a parent, citing privacy laws which they believe prohibit the school from providing the information to anyone other than the students themselves.

Any questions, please let us know. For further information, consult IRS Publication 970, “Tax Benefits for Education”.

Posted in Income Tax.

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