How do I claim expenses as a 1040?

How to report Tuition Statement Form 1098-T in Form 1040?

• I received 1098-T form from my graduate school in US. In the form, there are two nonzero amounts (others are blank): * Amounts billed for qualified tuition and related expenses (box 2) * scholarships or grants (box 5) I was wondering: 1.If the two amounts should be reported somewhere in federal tax 1040 form? 2.Payments received for qualified tuition and related expenses (box1) is zero, but on the back of the same paper, Personal Payments are nonzero which is what I actually paid for my tuition. Are the two not consistent with each other? Shall I report the nonzero Personal Payments that I paid somewhere in 1040 form? 3. The instruction of 1040 says there are two ways to claim the benefits (1). reported as adjustment to income in line 34 "tuition and fees" of Form 1040 attached with Form 8917 (2). reported as tax credit in line 49 “educational expenses" of Form 1040attached with Form 8863 If I understand correctly, it also says that I can choose only one of the above two ways, not both, does it? If yes, I was also which way to go? Does the choice depends on whichever favors me? Thanks and regards!

• Answer:

  The educational institution makes the choice of whether to report (1) amounts billed for tuition, or (2) amounts actually paid to them. One or the other of these boxes will have an amount, but not both. You have to reduce your qualified expenses by any scholarships in order to claim any of the education credits or deductions. If you do have eligible expenses, yes, you can choose the education benefit that does you the most good. The 1099-T can be good information for figuring out what your qualified expenses were, but you need to report what is actually paid during the year. For example, if your educational institution provides the "amount billed," that does not prove you actually paid it. Ignore that and count only what you paid during the year. Also, the education credits have different qualifying expenses than the tuition deduction.