What is the 1098-T? What deductions do I get if I'm a student?

Modified on Sun, 05 Feb 2023 at 08:10 PM

If you’re a college student, you’ll likely receive IRS form 1098-T detailing the amount you paid in tuition and other fees. You must report this form when filing your taxes — and it can also be used to help determine if you’re eligible for educational tax breaks, like the American Opportunity Tax Credit  or the Lifetime Learning Tax Credit. 

A 1098-T is a tuition statement that students receive when enrolled in post-secondary schooling such as a college, university, vocational school, or other eligible learning institution. It shows how much you paid in tuition and other related expenses during a given tax year.

While this form itself does not offer tax breaks, when you report this information in your tax return, it can be used to help you qualify for other educational tax credits, namely the American Opportunity Tax Credit and the Lifetime Learning Credit.

You can claim up to $2,500 in credit with the American Opportunity Tax Credit. You can claim 100% of the first $2,000 you spend in eligible school expenses (such as books and other supplies) and 25% of the next $2,000 you spend. You can only claim this credit during your first four years of post-secondary education. It’s also only available per student — you and your parents could not claim it for the same student in a given tax year.

The Lifetime Learning Credit allows you to claim 20% of eligible expenses, up to $10,000. So the most you can claim with this credit is $2,000.

You can only claim one of the above for a single qualifying student in a given tax year.

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