Tuition and Fees Deduction

[FreddieFarkle]

As the proud parent of one child attending a frightfully overpriced
undergrad institution, I am eyeing the "Tuition and fees deduction" on
line 34 of my 1040, as established by completing form 8917. My son's
tuition, fees and expenses is paid through the following items: (i)
some financial aid (ii) student loan, (iii) Texas Tomorrow Fund (a pre-
paid tuition plan), and (iv) my hard earned money. When I review form
8917 I establishes that room and board is not a "qualified education
expense". My son's college lumps all the tuition/fees and the room
and board together, and once the dough from items (i) through (iii)
has been applied, I get a bill for the rest. The point is, there is
no way to "know" whether my out-of-pocket expense (my payment to the
school) have gone to pay "qualified education expenses" or room and
board. Has Congress given me, in the line 34 deduction, yet another
impractical, and ultimately, useless deduction?

 

[Alan]

As the proud parent of one child attending a frightfully overpriced
undergrad institution, I am eyeing the "Tuition and fees deduction" on
line 34 of my 1040, as established by completing form 8917. My son's
tuition, fees and expenses is paid through the following items: (i)
some financial aid (ii) student loan, (iii) Texas Tomorrow Fund (a pre-
paid tuition plan), and (iv) my hard earned money. When I review form
8917 I establishes that room and board is not a "qualified education
expense". My son's college lumps all the tuition/fees and the room
and board together, and once the dough from items (i) through (iii)
has been applied, I get a bill for the rest. The point is, there is
no way to "know" whether my out-of-pocket expense (my payment to the
school) have gone to pay "qualified education expenses" or room and
board. Has Congress given me, in the line 34 deduction, yet another
impractical, and ultimately, useless deduction?

Assuming we are dealing with a qualified educational institution
(they participate in the Dept. Of Education Student Aid Program
and that's just about every accredited public, nonprofit, and
private post-secondary institution) they are obligated to prove
the student and the IRS, Form 1098-T that reflects the tuition
and related expenses. Related expenses do not include room and
board. In addition, I have yet to run across any college that
has not provided this break out when asked.

 

[Vic Dura]

The point is, there is
no way to "know" whether my out-of-pocket expense (my payment to the
school) have gone to pay "qualified education expenses" or room and
board. Has Congress given me, in the line 34 deduction, yet another
impractical, and ultimately, useless deduction?

The school should provide you with a 1099-T which shows the qualified
expenses. If you haven't yet received one, give them a call.

 

[Alan]

Assuming we are dealing with a qualified educational institution (they
participate in the Dept. Of Education Student Aid Program and that's
just about every accredited public, nonprofit, and private
post-secondary institution) they are obligated to prove the student and
the IRS, Form 1098-T that reflects the tuition and related expenses.
Related expenses do not include room and board. In addition, I have yet
to run across any college that has not provided this break out when asked.

I received an e-mail from the OP (bad etiquette) that doesn't
appear on the newsgroup. Here's the e-mail and my public response.

Yes, my son did get a Form 1098-T. But, you see, I have no

way > to no, of that amount on the 1098-T, how much of that was
paid > with financial aid dollars, pre-pidi tuition dollars, or
my > > > dollars.

Your original question dealt with your inability to determine
what represented qualified expense and what represented room and
board. You are now requesting an answer to an entirely different
question. I.e., your inability to determine who paid what.

My understanding of the process is that whenever you or some
other entity pay for higher education expenses any amount that is
so designated as paying for room and board would not be a
qualified ed. expense for the T&F deduction or either of the ed.
credits. Any payment coming from a QTP or out of tax-free
assistance and designated as paying for room and board would not
be qualified expenses. If the payment is not so designated, then
the IRS requires you to apply the payment first to tuition, fees
& related expenses and then to the unqualified expenses. (Don't
ask, I don't have a citation.)

As an example: If the Texas plan that allows for payment of
reasonable room and board is sent to the college and the payment
has no designation as to what part of the student's cost is being
paid, then it must first be applied to tuition, fees & related
expenses and then any excess would be applied to room and board.
The same rule would hold for payments you made.

Lastly, qualified education expenses paid with the proceeds of a
loan is deductible or eligible for the credit. Payments sent
directly to the school from a third party are considered paid on
the day the school credits the account.