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What Is Form 1098 and Why It Matters

Form 1098 is an official document that reports qualified education expenses paid during a tax year. The Internal Revenue Service (IRS) requires educational institutions to send this form to students and their families when they pay tuition, fees, and other qualified costs. The form comes in several versions, including the 1098-T for education credits and the 1098 for mortgage interest and property taxes.

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This form serves as proof of educational spending for tax purposes. When you file your federal income tax return, you may be able to report certain education expenses and potentially reduce the amount of tax you owe. The information on Form 1098 should match what you report on your tax return, so understanding this document matters for accurate filing.

Educational institutions issue Form 1098-T specifically to report qualified tuition and related education expenses. These expenses may include tuition, mandatory enrollment fees, and course materials required for enrollment or attendance. However, room, board, and transportation costs do not count as qualified expenses on this form.

The document typically shows up in your mailbox or through your school's online portal between January and March each year. Schools must provide this information to students by January 31st. You should review the form carefully to make sure all information is correct before using it for tax filing purposes.

Practical Takeaway: Locate your Form 1098 from your educational institution and verify that the institution name, your name, and reported expenses match your records before using this information on your tax return.

Types of Form 1098 and What Each Reports

The IRS uses several versions of Form 1098 to report different types of financial information. While they share similar names and formats, each form reports different expenses and serves different purposes on tax returns.

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Form 1098-T is the education-specific version that reports qualified education expenses for undergraduate, graduate, and professional degree programs. Schools issue this form when a student pays for tuition and related fees during the tax year. The form has two main boxes: one showing qualified education expenses paid during the year, and another showing scholarships and grants the student received. This distinction matters because scholarships may reduce the amount of education expenses you can report for tax purposes.

Form 1098 (the original version) reports mortgage interest paid on a home loan and property taxes paid during the year. While this guide focuses on education-related information, it is worth noting that homeowners may receive this form instead of or in addition to education forms.

Form 1098-F reports student loan interest paid during the year. If you made payments on federal or private student loans, your loan servicer will send you this form showing how much interest you paid. This interest may be deductible on your tax return, subject to income limits.

Some taxpayers receive multiple 1098 forms. For example, a parent paying for a child's college education while also paying a mortgage would receive both a 1098-T and a standard 1098. Understanding which form reports which expenses helps you organize your tax information correctly.

Practical Takeaway: Collect all 1098 forms your household receives and label them by type so you can organize education expenses, mortgage interest, and student loan interest separately when reviewing your tax situation.

How to Obtain Your Form 1098 Information

Form 1098 documents are issued by the organizations that collected the payments. For education expenses, your college, university, or trade school sends the form. For mortgage interest, your loan servicer sends the document. Understanding where to look and when to expect the form helps you stay organized during tax season.

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Educational institutions typically mail Form 1098-T or similar education reporting forms by January 31st each year. Many schools now offer online access through student portals or secure websites. You may be able to view and print your form through your school's financial aid office website or student account dashboard. Check your school's website for instructions on accessing electronic copies.

If you do not receive a Form 1098 by mid-February, contact your institution's financial aid or registrar office. Provide them with your name, student ID number, and the tax year in question. Schools sometimes issue forms late if a student's account has pending fees or if payment information was processed after the reporting deadline.

You can also contact the IRS directly at 1-800-829-1040 if you believe you should have received a 1098 form but did not. The IRS can help you trace where the form was sent or investigate if an institution failed to file the form. Having your student ID number, school name, and tax year ready will speed up this process.

Many tax software programs allow you to input information manually from your Form 1098 if you have an electronic copy. This approach works well if you prefer to file your taxes online rather than by mail.

Practical Takeaway: Contact your educational institution's financial aid office or check your online student account portal by mid-February to request your Form 1098 if you have not received it by mail.

What Information Appears on Form 1098 and How to Read It

Form 1098-T contains specific boxes of information, each serving a different purpose. Learning to read these boxes correctly helps you understand what expenses the form reports and how to use that information on your tax return.

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Box 1 shows the qualified tuition and related education expenses paid during the tax year. This number includes tuition, mandatory enrollment fees, and materials required for enrollment or attendance. It does not include living expenses, transportation, or optional services. The institution calculates this amount based on payments received during the calendar year.

Box 2 reports scholarships and grants received during the year. This is important because scholarships reduce the amount of expenses you can report as paid out of pocket. For example, if Box 1 shows $10,000 in expenses and Box 2 shows $6,000 in scholarships, only $4,000 may count as paid by you.

Box 3 indicates adjustments to qualified education expenses. Sometimes institutions reduce reported expenses after the original form is issued, or they may issue a corrected form showing different amounts. This box captures those changes.

Box 5 shows any refunds of qualified education expenses paid in a prior year. If you received a tuition refund in the current year for expenses paid in a previous year, that amount appears here.

Additional boxes may report whether the expenses relate to undergraduate or graduate study, whether they include student loan interest, or other details depending on the institution and situation.

Practical Takeaway: Write down the numbers from Boxes 1 and 2 of your Form 1098-T, subtract scholarships from expenses, and confirm this matches the out-of-pocket amount you actually paid before using it for tax purposes.

Education Tax Credits and How Form 1098 Information Connects

The federal government offers two main education tax credits that may reduce the amount of tax owed: the American Opportunity Credit and the Lifetime Learning Credit. Form 1098 provides the documentation needed to claim these credits, though the form itself does not determine whether you are eligible for either credit.

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The American Opportunity Credit may allow a credit of up to $2,500 per student per year if the student is pursuing an undergraduate degree and meets other requirements. To claim this credit, you report qualified education expenses paid during the year. According to IRS data from recent tax years, millions of taxpayers claim this credit annually, though the exact number of claimants varies.

The Lifetime Learning Credit offers a credit of up to $2,000 per tax return (not per student) for qualified education expenses. Unlike the American Opportunity Credit, this credit does not require the student to be working toward a degree and may cover graduate programs, professional certifications, and course improvements. The expenses reported on Form 1098 can be used to determine the credit amount.

Form 1098 information helps you calculate how much of your education expenses may qualify for these credits. However, claiming the credits involves additional calculations and may have income limits, phase-outs, and other requirements. The form is documentation, not permission to claim the credit.

In some cases, scholarships or grants reduce the expenses you can report for credit purposes. If a scholarship covers all your education costs, you may not be able to claim education credits on expenses the scholarship already paid for. This is why reviewing