Did anyone else see an increase in their tax refund thanks to the 1098-T form? I got mine a couple of weeks ago and I’m planning to file my taxes next week. I’m covering my expenses out of pocket after financial aid (no loans for me). My mom is worried that I might not receive a larger tax refund due to the reimbursements that many college students get through direct deposit. Can anyone share if these reimbursements can affect the size of your tax refund?
Did any of you guys get a bigger tax refund with your 1098-T form?
The 1098-T form is important for claiming education-related tax benefits, which can potentially increase your tax refund. If you’re paying out of pocket for your qualified tuition and related expenses after financial aid is applied, you may be eligible to claim the American Opportunity Tax Credit (AOTC) or Lifetime Learning Credit (LLC) on your tax return, depending on your situation.
Reimbursements that you receive from your college as scholarships or grants are usually not considered taxable income, and they won’t count against you when calculating your potential refund. However, you need to ensure that the expenses you report are for qualified tuition and fees that exceed the amount of scholarships and grants you received.
When you file your taxes, include your 1098-T form and keep track of your payments and eligible expenses. If you qualify for either of the tax credits, it could indeed lead to a larger refund. It might also be helpful to consult with a tax professional or use tax software that can help you navigate these details more clearly. Good luck with your filing!