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Old 02-25-2010, 04:45 PM
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Question Qualified Education expenses

I was told by my tax preparer that the student loans that I took out last year would not be considered qualified education expenses. This is because they were not listed in box 1 of my 1098-T. That box was actually blank even though my balance with the school was paid in full with student loans. He did offer me the ability to deduct my school box and other miscellaneous expenses by using the Hope credit but after looking into that, school tuition can fit in there too. I fear that my tax preparer is ill informed and I don't want to loose money because of it.

Thanks,

Jon Love



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Old 02-25-2010, 06:36 PM
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Join Date: Feb 2010
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need a new cpa

Your preparer is mistaken...unless you haven't told the whole story...here is direct guidance from the IRS pertaining to the lifetime learning credit. Which I assume would be the most opportunistic for you based on what little info you shared.

Paid with borrowed funds. **You can claim a lifetime earning credit for qualified education expenses paid with the proceeds of a loan. You use the expenses to figure the lifetime learning credit for the year in which the expenses are paid, not the year in which the loan is repaid. Treat loan payments sent directly to the educational institution as paid on the date the institution credits the students account.



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