Does this mean I should be keeping all my textbook receipts? I spent like $900 on books this semester but wasn't planning to include that since it's not on my 1098-T. Can I actually claim that?

Yes, absolutely keep all your textbook receipts! The IRS specifically states that required textbooks are qualified education expenses for tax credits, even though they don't appear on your 1098-T. For the American Opportunity Credit in particular, required books, supplies and equipment are qualified expenses even if you don't buy them from the school. Just make sure you can verify they were required for your courses - having the syllabus that lists required materials is good supporting documentation.

This just confused me more. My Box 5 is higher than Box 1 because I got more aid than my tuition cost, and they refunded the extra to my bank account, which I used for apartment rent. So is that taxable or not??

The 1098-T is so confusing because some schools report in Box 1 (payments received) and others use Box 2 (amounts billed). My school uses Box 2 and leaves Box 1 empty, which makes calculating everything a nightmare.

We used the same provider all year - it's a daycare center at a local community college. They provided me with their Tax ID number which I entered exactly as they gave it to me. The educational vs. care distinction is interesting - could that be why the software is reducing my eligible expenses? The program is called "Early Childhood Learning Center" but it's definitely daycare while I'm at work, not a school. Do I need to clarify this somehow in my filing?

That's definitely what's happening then. When a provider has "Learning Center" in the name, tax software often flags it for partial educational expense allocation, even though it's functioning as childcare while you work. You'll need to override this in the software by specifically indicating that the primary purpose is care, not education. In TurboTax, there should be a question about the "nature of the services provided" where you can specify it's for care while you work. Make sure that's correctly marked. If the software doesn't allow you to override this, you might need to enter the provider twice - once for the "care" portion and once for what they're misclassifying as "educational," though this isn't technically correct and could create other issues.

Overnight camps definitely do NOT qualify for the Child and Dependent Care Credit. The IRS is very clear about this in Publication 503. Only day camps can qualify. The reasoning is that overnight camps are considered primarily for entertainment rather than for care that enables you to work. Day camps (even specialty ones like sports or computer camps) CAN qualify if they allow you to work or look for work, but any overnight program is specifically excluded by IRS rules.

Thanks for clarifying that! I had a feeling overnight camps wouldn't qualify, but my neighbor insisted they included their kids' sleepaway camp on their taxes. I'll stick with just claiming the day camps my kids attended. Do you know if there's any way to deduct overnight camps under a different tax benefit? Or are those expenses just completely non-deductible?

Can I get the Earned Income Credit if my parents still claim me as a dependent though? And how do I find out what my state offers for students specifically?

You generally can't claim the Earned Income Credit if someone can claim you as a dependent, so that would rule you out if your parents are claiming you. For state-specific education benefits, just search "[your state] education tax credits" or check your state's department of revenue website. Most states have a dedicated section for education-related tax benefits. Some states like Minnesota, Wisconsin, and New York have fairly generous education deductions or credits even beyond what's available federally.

This is true! I work at a university financial aid office, and we always tell students to keep all receipts and even emails/syllabus pages that show requirements. The IRS can be picky about what counts as a "required" educational expense vs. a personal preference.

That's a good point! I'm in New York - do you happen to know if there are any specific child-related tax benefits here that I should be aware of?

New York does have its own child tax credit that's based on the federal credit, but with some differences. They also have a specific credit for childcare expenses which is separate from the federal one. I'd recommend checking the NY State Department of Taxation and Finance website for the specifics. I found that my state credit was actually pretty significant - it was worth keeping extra documentation for childcare expenses even though the federal benefit wasn't huge for my situation. Every state has different rules, so definitely look into the NY-specific credits.

Do you know if breast pumps and nursing supplies qualify for FSA/HSA? My HR department gave me conflicting answers.

Thanks for the insights from your experience! Quick question - I have a play area set up that's pretty much only for the child during care hours, but my kids sometimes use it on weekends. Does that disqualify it from being "exclusively" for business?

That's a great question about the play area. The "exclusive use" test is pretty strict with the IRS. If your family uses the area on weekends, it technically wouldn't qualify for the home office deduction under the exclusive use requirement. However, there's a special rule for daycare providers that might apply to your situation. If you're a licensed care provider, you can still take the deduction even if the space is used for personal purposes during non-business hours. The deduction would be prorated based on both the percentage of your home used AND the time it's used for business. For example, if you use 20% of your home for 40 hours a week (out of 168 total hours), you'd multiply those percentages to get your business use percentage.

I use it and love it! You can track mileage automatically with the app - it uses GPS to log your trips and then you just swipe left for personal or right for business. Super easy to categorize expenses too - it connects to your bank account and credit cards. The quarterly tax estimate feature is worth the subscription alone.