Do we file our tuition in our 2008 taxes?

[SCCpharm]

I received a 1098-T form from my school.

Box 1 (Payments received for qualified tuition and related expenses) is blank.

Box 2 (Amounts billed for qualified tuition and related expenses) is filled $xx,xxx.xx

I paid all of my tuition with student loans, so do I need to report the $xx,xxx.xx under tuition for the 2008 taxes? Or are they reported later when I start paying off my loans?

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[cpants]

You file it now since you are paying it now. Keep in mind though there are some deductions for tuition you can only make once or twice, so it would behoove you to speak to a tax professional to determine when the most advantageous way to deduct your tuition is. It depends on the amount of tuition you paid, the amount of money you earned in the year, and what you anticipate those numbers to be in the future.

 

[AndyFromMDTAXES]

You will use the 1098-T to help figure out how much you paid during the year that is eligible for the Lifetime Learning Credit. Keep in mind that when you borrow money to pay for tuition and required fees, you claim those amounts in the year the loan proceeds are disbursed to pay your education expenses, and not when the loans are repaid by you.

For 2008, the lifetime learning credit is equal to 20% of the first $10k spent on tuition and fees. And a credit is more valuable than a deduction, since a credit is a dollar-for-dollar reduction in your taxes. With a deduction, the amount of your savings is the amount of the tax break multiplied by your tax rate.

So let's say that your tax liability for the year is $2500, and you will max out the Lifetime Learning Credit. After claiming the credit, your federal income tax for the year goes down to just $500.

For more info about this tax break, check out the instructions to IRS Form 8863 available at: http://www.irs.gov/pub/irs-pdf/f8863.pdf.