Form 1098

There are Two types of Educational Credit;

1
2

1
2
3

4
5

6
7
8

9
10
11

2
1
2
3
4
5
6
7
8

9
10
11

3
1

4
5

1
 a
b
c
d

a
b
c
d
e
f

Box 1

Box 2
Box 3

Box 4

Box 5

Box 6

Box 7

Box 8

Box 9

Box 10
 Form 1098 T

There are Two types of Educational Credit;

Hope Scholarship Tax Credit.
Lifetime Learning Tax Credit.

Hope Scholarship Tax Credit;

It is a Non Refundable Credit available for each student.

The Maximum credit available per eligible student is $ 1650 for upto two tax years.

The Credit is calculated as follows;

a. 100% of the first $ 1100.
b. 50 % of the next $ 1100.
It is available only until each student's first two years of postsecondary education are comple

The Gulf opportunity zone stundents may claim a maximum credit of $ 3300 and credit will b
a. 100% of the first $ 2200.
b. 50 % of the next $ 2200.
The Tax payer cannot claim the credit if his Modified Adjusted Gross Income (MAGI) is $ 5500
The student must be at least a half-time student at some time during the tax year at an eligi
was graduate or not it is to be reported.
The Tax payer cannot claim the credit if the dependent is convicted of a federal or state or st
crimes) before the end of the year.
Qualifying expenses include tuition and fees as well as the amount of certain scholarships, g
The Credit is not allowed to the Tax payers who file separate returns.
The Education Institution is required to provide the taxpayer with a form 1098 T.

The phase out for the credit is between:

( $ 45000 - $ 55000) for Single, HOH and QWDC
( $ 90000 - $ 110000 for Joint filers

Lifetime Learning Tax Credit.

It is a Non Refundable Credit available for each student.
The Maximum credit available per eligible student is $ 2000 for any number of years.
The Credit is calculated as 20% of the first $ 10000 of the qualified tuition and related expen
The Gulf opportunity zone students may claim a maximum credit of $ 4000 for any number o
The Credit is available for any levels of education and there is no limit on the number of year
The Credit is not allowed to the Tax payers who file separate returns.
The Tax payer cannot claim the credit if his Modified Adjusted Gross Income (MAGI) is $ 5500
The student must be enrolled in an eligible program leading to an undergraduate or graduate
school during the calendar year or may be enrolled in any course of improve in Student job s
Qualifying expenses include tuition and fees as well as the amount of certain scholarships, g
The Education Institution is required to provide the taxpayer with a form 1098 T.
The Felony drug conviction rule does not apply in this case.

The phase out for the credit is between:

( $ 45000 - $ 55000) for single, hoh and qw
( $ 90000 - $ 110000 for joint filers

Tuition and fees Tax deduction

This Deduction is applicable for those whose are not qualify for either Hope or Lifetime Learn
and only for the student / tax payer who is enrolled under the eligible postsecondary instituti
vocational school.
The Tuition and Fees Tax deduction can reduce taxable income by as much as $ 4000 and th
adjustment to income even if they don’t itemized on Schedule A. Personal living and family e
and board, insurance, medical & transportation are not deductible expenses.
The Tax payer can claim the credit if his Modified Adjusted Gross Income (MAGI) is $ 65000 o
130000 or less for a Married filing jointly but not greater than $ 80000 for a single & $ 1600
are not eligible for this deduction.
The Education Institution is required to provide the taxpayer with a form 1098 T.
Generally, the deduction is allowed for qualified tuition and expenses paid in 2006 in connect
institution of higher education during 2006 or for an academic period beginning in 2006 or in
2007.
a. For instance, if you paid $1,500 in December 2006 for qualified tuition for a spring 2007 se
This deduction
January cannot
2007, that be claimed
$1,500 if theto
can be used tuition
figureand
thefees
2006were paid with tax-free scholarships,
deduction.
Pell Grants), or other educational assistance including employer-provided education assistan
benefits received to pay for education expenses

Qualified Education Expenses

For purposes of the student loan interest deduction, these expenses are the total costs of att
educational institution, including graduate school. They include amounts paid for the followin
Tuition and fees.
Room and board.
Books, supplies, and equipment.
Other necessary expenses ( such as transportation)

Expenses That Do Not Qualify for Edu Credits & Tution and Fees Deduction:
Insurance,
Medical expenses (including student health fees),
Room and board,
Transportation, or
Similar personal, living, or family expenses.
This is true even if the amount must be paid to the institution as a condition of enrollment or

Shows the total payments received from any source for qualified tuition and related expense

shows the total amounts billed for qualified tuition and related expenses less any related red
Shows whether your institution changed its method of reporting during the year. It has chang
if the mothod (payments received or amounts billed) used for the year is different than the re
previous year. You should be aware of this change in figuring your allowable tuition and fees
credits. the deduction and the credits are allowable only for amounts actually paid during the
reported as billed, but not paid, during the year.

Shows any adjustment made for a prior year for qualified tuition and related expenses that w
year Form 1098 T. This amount may reduce any allowable education credit you may claim fo

Shows the total of all scholarships or grants administered and processed by the eligible educ
amount of scholarships or grants for the calendar year (including those not reported by the in
amount of any allowable tuition and fees deduction or the education credit you may claim fo

Shows adjustments to scholarships or grants for a prior year. This amount may affect the am
tuition and fees deduction or education credit you may claim for the prior year.

Shows whether the amount in Box 1 or 2 includes amount for an academic period beginning

Shows whether you are considered to be carrying at least one-half the normal full-time workl
study at the reporting institution. If you are at least a half-time student for at least one acade
during the year, you meet one of the requirements for the Hope Credit. You do not have to m
requirement to qualify for the tuition and ffees deduction or the lifetime learning credit.

Shows whether you are considered to be enrolled in a program leading to a graduate degree
certificate, or other recognized graduate-level educational credential. If you are enrolled in a
are not eligible for the Hope credit, but you may qualify for the tuition and fees deduction or
credit.

Shows the total amount of reimbursements or refunds of qualified tuition and related expens
The amount of reimbursements or refunds for the calendar year may reduce the amount of a
fees deduction or education credit you may claim for the year.
ngle and $ 110000 or more for a Married filing jointly.

ude cost of books and living expenses.

edit can be taken.

ngle and $ 110000 or more for a Married filing jointly.

ude cost of books and living expenses.

reimbursements or refunds.
Types Of Source Document For 1098-T
1
2
3
4
Types Of Source Document For 1098-T
Organizer Page
1098-T
Handwritten Information
Typed Information/Printed Income Summary

1 Organizer Page
2 Form 1098-T
Input Screens in Tax Softwares
1 P-15

P-15
Box No.Description Input Screen Box
1 Qualified Payments P-15 71

2 Amount billed for Qualified

Tuition and related expenses P-15 71
3 Education Code P-15 72

PRO-FX
SL.NO PARTICULARS INPUT OUTPUT

1 Where to key 1098 T in the software ?.

P 15 - We should To View the output
go for Education we should see
Credits or Tuition whether form 8863
and fees deduction is generated. If it is
and there we generated we
should type first should see the
name, Last name, calculations and
SSN no of the finally we should
dependent,then see the amount in
qualified expenses line item no 17 in
and for education Form 8863 which is
code we should to taken over to
select 1, 2, 3 as Form 1040 line no
depend upon the 50.
cases.
Output
Form 8863 Part I (Hope Credit) - Col. C or Part II (LLC) Col.C

Form 8863 Part I (Hope Credit) - Col. C or Part II (LLC) Col.C

GO SYSTEM
INPUT OUTPUT