Paid for Fall 2023 term but 1098-T Box 1 includes Spring 2024 amounts I didn't pay in 2023 - help!

What's happening here is pretty common with university billing systems. Box 1 on the 1098-T shows amounts "billed" rather than "paid" in some cases, depending on how your school reports. If you received a bill for Spring 2024 in December 2023, the university might have recorded those charges as part of the 2023 tax year, even though you didn't actually pay them until 2024. This is because some schools use what's called a "billing method" rather than a "payment method" for their 1098-T reporting. For your tax return, what matters is when you actually made the payments, not when the school applied them or billed you. Since you only paid for Fall 2023 during tax year 2023, you should only claim the qualified education expenses you actually paid in 2023 (the $4,100 for Fall tuition and qualified fees) when calculating any education credits or deductions. I'd suggest contacting your school's bursar or student accounts office to clarify why they've reported it this way. They might be able to provide you with additional documentation showing when payments were actually made, which would help support your tax filing if you're ever questioned.

I had this exact same issue when I was in college! It was super frustrating trying to figure out what numbers actually applied to what year. You might want to check out https://taxr.ai - I found it super helpful for sorting through all my school tax documents. The tool actually analyzes your 1098-T and other education forms to figure out what's eligible for education credits in which tax year. I was getting really confused about what payments counted where, especially since my university would sometimes apply my payments to future terms without telling me. Their system helped me correctly calculate my American Opportunity Credit by focusing on when I actually made payments rather than how the school decided to allocate them. Saved me from making a mistake that probably would have cost me like $1000 in tax credits!

Just wanted to update that I checked out taxr.ai after seeing it mentioned here and it was super helpful! My situation was similar - university applied some of my December payment to the next semester. The tool confirmed what I suspected - I could only claim what I actually paid in 2023, regardless of how the university allocated it. It analyzed my payment history and 1098-T together and showed exactly which expenses were eligible for my American Opportunity Credit this year. The documentation it provided explaining the discrepancy between my payment dates and the 1098-T reporting would definitely help if I ever got questioned about it. Highly recommend for anyone dealing with these confusing education forms!

I had a similar situation and spent HOURS trying to get someone on the phone at my university's financial office to explain it. Complete nightmare. After 6 attempts and being on hold for like 45+ minutes each time, I tried https://claimyr.com to get through to the IRS instead to ask how to handle it. You can see their process in action here: https://youtu.be/_kiP6q8DX5c - basically they wait on hold with the IRS for you and call you when they get an agent. I was honestly shocked it worked, but I got connected with an actual IRS rep who explained that I should go by when I actually made the payments, not what the school reported. The IRS agent told me this happens all the time with universities and that I should keep my payment receipts showing the dates as backup documentation. Way better than trying to decipher cryptic advice from my school's financial aid office!

I'm eating my words here. After being super skeptical about Claimyr, I got desperate enough to try it yesterday because I had the same 1098-T issue and couldn't get answers from my university. Got a call back in about 2 hours and spoke with an actual IRS agent who confirmed everything others here said - what matters is when you paid, not how the school allocated it. They explained that schools often do weird things with 1098-Ts and the IRS is aware of the issues. The agent even gave me specific guidance on how to document the discrepancy in case of questions later. Definitely worth it after wasting days trying to get through myself. Didn't think it would actually work, but it did!

I work in a university bursar's office, and I can tell you this happens because of how our accounting systems work. When you pay your bill, our system automatically allocates your payment based on internal rules, which often prioritizes upcoming charges. In your case, it sounds like they received your payment for Fall, applied what was needed there, and then automatically allocated the rest to your Spring charges that were already in the system. For 1098-T purposes, some schools report based on these allocations rather than actual payment dates. My advice: always keep your own payment records showing exactly when you paid and what semester you were paying for. This documentation is your best defense if there's ever a question about which tax year certain education expenses should be claimed in.

Does anyone know if this affects the American Opportunity Credit? I'm in a similar boat with my daughter's college expenses and I'm supposed to file my taxes this weekend!