Are You Calculating Education Tax Credits Correctly? Here's What You Need to Know

TLDRLearn how to calculate education tax credits correctly, as many people have been doing it wrong. Don't rely solely on the Form 1098-T, but also gather other transaction history and proof of expenses. Starting in 2018, colleges and universities will report the amounts actually paid instead of billed. You can amend your tax return if you realize you've been calculating it wrong. You can also increase the education credit by including scholarships or fellowships in income. Consult Pub. 970 for more information.

Key insights

💡Many people have been calculating education tax credits incorrectly, relying solely on the Form 1098-T.

📚It is best to gather additional transaction history and proof of expenses when calculating education tax credits.

📝Starting in 2018, colleges and universities will report the actual amounts paid for qualified education expenses.

📚If you realize you've been calculating education tax credits incorrectly, you can amend your tax return.

💰You can increase the education credit by including scholarships or fellowships in income.

Q&A

What should I do if I realize I've been calculating education tax credits incorrectly?

—If you realize you've been calculating education tax credits incorrectly, you can amend your tax return up to three years from the filing date.

Should I rely solely on the Form 1098-T when calculating education tax credits?

—No, it is best to also gather additional transaction history and proof of expenses to ensure accurate calculations.

What changes were implemented in 2018 regarding the reporting of education expenses?

—Starting in 2018, colleges and universities are required to report the actual amounts paid for qualified education expenses.

Can I increase my education credit by including scholarships or fellowships in income?

—Yes, including scholarships or fellowships in income can potentially increase your education credit.

Where can I find more information about education tax credits?

—For more information about education tax credits, consult Publication 970.

Timestamped Summary

00:00Many people have been calculating education tax credits incorrectly, relying solely on the Form 1098-T.

02:51Starting in 2018, colleges and universities will report the actual amounts paid for qualified education expenses.

06:38If you realize you've been calculating education tax credits incorrectly, you can amend your tax return up to three years from the filing date.

07:20Including scholarships or fellowships in income can potentially increase your education credit.

09:57For more information about education tax credits, consult Publication 970.

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