When it comes to dealing with school paiements, there are a variety of tax forms that could come into play. If you’re shelling out money for tuition or other education-related expenses, whether for yourself or a dependent, there’s a chance you might qualify for the American Opportunity Tax Credit or the Lifetime Learning Credit when it’s time to file your taxes. These credits come with the perk of potentially trimming down your tax bill, and they might even yield a partial refund. This means that even if you don’t owe any tax, you could still get back a portion of the credit in the form of a refund.
To actually snag these credits, you’ll need to tackle a couple of forms. First up is Form 1098-T, otherwise known as the Tuition Statement. This little gem is something your school should shoot over to you. Additionally, Form 8863, a.k.a. Education Credits, needs to be tackled and then attached to your tax return. Now, if you’re using tax-free funds to cover those school expenses, like money from a 529 plan or Coverdell Education Savings Account, here’s the kicker: you won’t be able to cash in on an education credit. The flip side is, depending on the specifics, you might not even have to bring up those tax-free funds when you’re filling out your tax return.
Hope this info proves useful. Don’t hesitate to reach out if you’ve got more questions.