Thread by @PFforPhDs

PSA for funded #PhD students:

If you blindly throw the numbers from your Form 1098-T into tax software or over to a tax preparer, odds are that you are paying TOO MUCH in income tax.

No #gradstudent can afford to do that!

#AcademicTwitter #AcademicChatter #gradschool

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Of course, I can’t say this is true for everyone, but I’ve seen it time and time again for fully funded graduate students, particularly those whose student health fees and insurance premiums are paid on their behalf.

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Here’s why:

The IRS allows you to use your “qualified education expenses” (QEEs) e.g., tuition and some fees/expenses, to reduce your tax liability through 1 or 2 education tax benefits.

But what shows up on Form 1098-T in Box 1 is not (necessarily) the sum of your QEEs.

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The number in Box 1 is the sum of the payments received for your “qualified tuition and related expenses.”

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If you look at the definitions of QEEs (there is a different definition for each education benefit) vs. “qualified tuition and related expenses,” they are not the same.

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“Qualified tuition and related expenses” as defined for Form 1098-T EXCLUDES some types of fees that ARE qualified education expenses for one of the education tax benefits.

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Basically, if you use Box 1 of Form 1098-T as the totality of your QEEs, you are potentially leaving out some other QEEs that could be used to further reduce your tax liability through one of the education benefits.

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I’m being a bit vague here because I don’t want to overwhelm you with the details of the definitions!

I’ve copied the definitions of QEEs into this article, which explains how to prepare your #gradstudent tax return:

pfforphds.com/prepare-grad-s…

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That article also covers a little-known method by which you might be able to even FURTHER reduce your tax liability using your education tax benefits.

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If you want in-depth assistance with preparing your tax return and using your qualified education expenses to their maximum effect, join my tax workshop! You get immediate access to videos and worksheets, plus two live Q&A calls between now and 4/15.

gum.co/tax2019gradstu…

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References for this thread:

Publication 970 Chapters 1 p. 6, definition of QEE for making scholarship/#fellowship income tax-free irs.gov/pub/irs-pdf/p9…

Instructions for Form 1098-T p. 2, definition of qualified tuition and related expenses: irs.gov/pub/irs-pdf/i1…

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Please RT to help your #gradstudent peers NOT send too much money to the IRS!

#PhDchat #PhDlife #PhDAdvice

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