| “1. Does the tax we paid on this money throughout the year qualify as an education expense on the 8917?”---> No; generally, qualified education expenses are amounts paid in 2010 for tuition andfees required for the student’s enrollment or attendance at an eligible educational institution.
“2. Our 1098 has information in box 2 (not 1) and in 4 and 5. What do we do with this information? “--->Box "two" represents total amount billed for tuition and qualified fees during calendar year 2010. If the student received a waiver during the year, then the amount of the waiver would reduce the amount in box "two." Box "four" nets adjustments to the student's account. If a number is posted to box "four," then this amount should be subtracted from the amount in box "two." Items included in box "four" are the tuition and fee adjustments during the prior year. For example, if the student registered for a class in November 2009 for the spring 2010 semester. The amount would show as an adjustment on the 1098-T because the registration took place in calendar 2009. Remember to subtract box 4 from box 2.Box "five" reflects financial aid and scholarships made to the student during the tax year. If the student's aid exceeds tuition and fees, then the tax credit may not be taken. Remember to subtract box 5 from box 2 .
You need to keep it for your records. Since the University sends your 1098-T information to the IRS, there is no need to attach a copy of the form to your tax return. The information contained in the 1098-T will help you to determine if you may claim the Hope or the Lifetime Learning education tax credits using IRS Form 8863
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