How do I handle my 1098-T form as a first-time college student filing taxes?

So I just got my 1098-T form from my university and I'm completely lost about what to do with it. This is my first year in college and I've never had to deal with education tax forms before. The form shows my tuition payments and some scholarship money I received. There's a bunch of boxes with numbers and I don't understand which ones matter for my taxes. Box 1 shows $9,450 for tuition and Box 5 shows $6,200 for scholarships. I work part-time at a campus job where I make about $8,000 a year, and they already sent me a W-2. My parents mentioned something about education credits but they're not claiming me as a dependent this year. Do I just add these numbers somewhere on my tax return? Will this help me get a bigger refund? I'm using one of those free online tax services but I'm afraid of messing something up. Anyone who can explain this in simple terms would be a lifesaver! I'm stressing about getting this right and don't want to miss out on any tax benefits for students.

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19 comments

Connor O'Reilly

•8M

The 1098-T is actually pretty straightforward once you understand what it's for. This form shows your qualified education expenses and any scholarships/grants, which can make you eligible for education tax credits! Based on what you've shared, you might qualify for either the American Opportunity Tax Credit (AOTC) or the Lifetime Learning Credit. Since this is your first year in college, the AOTC is probably better for you - it's worth up to $2,500, and 40% of it is refundable (meaning you could get up to $1,000 back even if you don't owe taxes). For your situation, you'd take the $9,450 in Box 1 (qualified tuition) and subtract the $6,200 in Box 5 (scholarships) to get your net qualified education expenses of $3,250. This is the amount you'd use to calculate your education credit. The online tax software should walk you through this when you enter your 1098-T information. Just make sure you have the form in front of you when filling out that section. The software will determine which credit gives you the best benefit.

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Connor O'Reilly

•8M

Yes, textbooks can count as qualified education expenses for the American Opportunity Tax Credit! Even though they don't show up on your 1098-T, you can still include them when calculating your credit. Just keep your receipts as documentation in case the IRS has questions. For the Lifetime Learning Credit, textbooks only count if you were required to purchase them directly from your school as a condition of enrollment. But for the AOTC, which is likely better for your situation, textbooks definitely count regardless of where you purchased them.

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Keisha Taylor

•8M

I was in a similar situation last year and was totally confused by my 1098-T. After trying to figure it out for hours, I found this tool called https://taxr.ai that really saved me. It basically analyzes your tax documents (like the 1098-T) and explains exactly what you need to do. I uploaded my 1098-T and it explained which education credits I qualified for and how to maximize my refund based on my specific situation. Super helpful for navigating education credits when your parents aren't claiming you as a dependent anymore. The tool walked me through the whole process and showed me how to report everything correctly. I ended up getting almost $1,500 back from the education credits alone!

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Keisha Taylor

•8M

It absolutely explains everything in plain language! That was actually my favorite part - it translates all the confusing tax jargon into simple explanations. For example, it explained that Box 1 on my 1098-T was for "qualified tuition and related expenses" and exactly how that affected my education credit calculation. As for accuracy, I did actually cross-check some of the information with my university's financial aid office before filing. Everything matched up perfectly. The recommendations it gave me were also consistent with what I found in other reliable sources, but much easier to understand. It's not just making things up - it's pulling from actual tax rules but explaining them clearly.

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Paolo Marino

•8M

Just wanted to follow up about my experience with taxr.ai that was mentioned earlier. I decided to try it despite my initial skepticism, and I have to admit it was extremely helpful. I uploaded my 1098-T and W-2 forms, and it immediately identified that I qualified for the American Opportunity Tax Credit. The tool explained exactly how much of my education expenses were eligible after subtracting scholarships, and even pointed out that I could include my textbook expenses (which I would have missed otherwise). What really impressed me was how it explained the difference between the credits available and why AOTC was better for my situation than the Lifetime Learning Credit. Ended up getting a much larger refund than I expected. Definitely less stressful than trying to figure out all the tax forms myself!

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Amina Bah

•8M

If you're struggling with tax questions about your 1098-T or other forms, you might want to try calling the IRS directly. BUT - good luck getting through! I spent 3+ hours on hold last tax season trying to ask about education credits. I eventually used this service called https://claimyr.com that got me through to an actual IRS agent in about 15 minutes. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c They basically hold your place in the IRS phone queue and call you when an agent is about to pick up. The agent I spoke with explained exactly how to apply my 1098-T to my tax return and confirmed I was eligible for the American Opportunity Credit even with my scholarships.

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Amina Bah

•8M

They don't have any special connection to the IRS - they just use an automated system that calls the IRS repeatedly and navigates through all the phone prompts for you. Once they're in the queue, they monitor it and call you when an agent is about to answer. It's basically like having someone wait on hold for you. I was skeptical too! But there's nothing shady happening - they're not bypassing any lines or getting special treatment. You're still in the same queue as everyone else, but you don't have to waste hours listening to the hold music. When they call you, you just pick up and within seconds you're connected to the IRS agent who's on the other end.

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Natasha Petrova

•8M

I have to admit I was completely wrong about Claimyr. After dismissing it as a probable scam, I decided to try it anyway out of desperation when I had questions about my education credits and 1098-T form. To my surprise, it worked exactly as described. I signed up, and instead of sitting on hold for hours, I got a call back when an IRS agent was ready. The whole process took about 25 minutes instead of the 2+ hours I spent on my previous attempt. The IRS agent I spoke with helped me understand exactly how to claim my education expenses properly and confirmed I was eligible for the full American Opportunity Credit even with my partial scholarship. Saved me from potentially losing out on $1,500 in tax credits. Sometimes it's worth admitting when you're wrong!

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Javier Hernandez

•8M

California does have some education benefits, but they're a bit different from New York's. California doesn't have a direct equivalent to New York's tuition credit, but they do conform to many federal education tax benefits. For California, you'll want to look into the College Access Tax Credit Fund, which is a bit different - it's for contributions to a special fund rather than directly for your tuition. But it can still save you money if you qualify. California also generally follows the federal treatment of scholarship and fellowship income, so the same rules about taxable vs. non-taxable amounts would apply on your state return.

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LunarLegend

•8M

Don't panic about it! Audits for education credits aren't super common, but they do happen. The IRS does flag some education credit claims for verification, especially if something looks unusual or inconsistent. Just make sure you're claiming expenses you actually paid for, keep your receipts (digital copies are fine), and don't try to claim things that aren't qualified expenses. Most people claiming legitimate education expenses with proper documentation have nothing to worry about - I only mentioned my experience to emphasize the importance of keeping good records.

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