Should I amend last year's tax return or not?

[Cheburashka]

I'm a teacher in grad school, and in late 2021, I paid for my spring 2022 tuition, which was my first semester. I did not get a 1098-T from the university for the amount I paid in 2021, and when I called them about that last year, they told me that amount would show up on my 2022 1098-T form. My mistake for believing them- I'm not a tax expert. So I recently got my 2022 1098-T, and naturally, the tuition I paid in late 2021 isn't included on it, and the university says they can't change my 2022 1098-T or issue me a 2021 1098-T, and that they also "don't give tax advice", so couldn't discuss the matter further. Thanks, university.

Anyway, I suppose my choices are to either:

1. Amend my 2021 return and claim the tuition paid, despite not having a 1098-T at all that year, or
2. Claim all of the money paid in both 2021 and 2022 on my 2022 return, even though the amount will exceed that listed on my 2022 1098-T.

I do not want to be audited, but I do want to claim what I am entitled to. I also don't want to have to pay a tax advisor to talk about this, because as a teacher I don't make very much. Does anyone have any advice as to which is the better option?

 

[lynxstch]

I don't know the answer, but @TAX GUY might. Hopefully he sees this and can answer your question.

 

[NYCgrrl]

You can also call the IRS and ask them. They do not “track” who is calling them.

 

[Miffy]

You can also call the IRS and ask them. They do not “track” who is calling them.

This is the best advice. Just don't call the IRS on a Monday morning--that's when they have a huge call volume. The people who're on their phone line are extremely knowledgeable and helpful.

 

[TAX GUY]

I'm a teacher in grad school, and in late 2021, I paid for my spring 2022 tuition, which was my first semester. I did not get a 1098-T from the university for the amount I paid in 2021, and when I called them about that last year, they told me that amount would show up on my 2022 1098-T form. My mistake for believing them- I'm not a tax expert. So I recently got my 2022 1098-T, and naturally, the tuition I paid in late 2021 isn't included on it, and the university says they can't change my 2022 1098-T or issue me a 2021 1098-T, and that they also "don't give tax advice", so couldn't discuss the matter further. Thanks, university.

Anyway, I suppose my choices are to either:

1. Amend my 2021 return and claim the tuition paid, despite not having a 1098-T at all that year, or
2. Claim all of the money paid in both 2021 and 2022 on my 2022 return, even though the amount will exceed that listed on my 2022 1098-T.

I do not want to be audited, but I do want to claim what I am entitled to. I also don't want to have to pay a tax advisor to talk about this, because as a teacher I don't make very much. Does anyone have any advice as to which is the better option?

Without getting into details or providing tax advice....

Amending *may* be a better option, for a few reasons. First, taxpayers are/report on the cash basis, meaning when income is received it's reported and the same applies with expenses, when they're paid is when they're deducted. If the tuition was paid in 2021, then it should be a 2021 deduction (or credit if that applies). Second, there's typically limits/caps on amounts paid for education. Depending on YOUR situation, it *may* be more beneficial to amend to deduct/claim the tuition paid. Also, depending on exactly what/why it was for, there's either a tuition/fees deduction or one of two education credits. Credits are always more beneficial than deductions (credit is a dollar for dollar reduction of tax while a deduction is at whatever your highest tax rate is).

Seek out a tax professional. Not a "kitchen table" tax preparer. I'd also suggest avoiding the big box/franchise type places too. You'd be surprised to probably find the fees for a CPA/EA are similar to those franchise stores (and in many cases, less). You can pay the fees and possibly still have a reduction of tax liability enough to benefit you. Or, if you do nothing or it's done wrong, it'll cost you more (in paying more tax than needed or now fixing an even bigger mistake).

 

[disneychrista]

Since you paid in 2021 it should be claimed on your 2021 taxes. I would not included in my 2022 taxes.

 

[TAX GUY]

You can also call the IRS and ask them. They do not “track” who is calling them.

Best of luck if you try to call them. They are STILL backlogged from 2020 tax returns. Still short staffed and the frequency that a live person will answer is and has been slim. Still an option though, and if you are lucky enough to get through, hopefully the agent that answers knows what the answers are for you.

 

[Miffy]

Best of luck if you try to call them. They are STILL backlogged from 2020 tax returns. Still short staffed and the frequency that a live person will answer is and has been slim. Still an option though, and if you are lucky enough to get through, hopefully the agent that answers knows what the answers are for you.

Very true.

But, OP, I would highly advise against trying to do this yourself. You need advice either from the IRS itself or from a tax professional.

You do not want to get audited. It'd be better to just blow off the 2021 deduction you didn't get rather than exposing yourself to this sort of scrutiny although of course I understand why you want to do this. Money's involved, although it might be wiped out by any fee you'd have to pay to a CPA.

 

[Princesca]

With some exceptions, you generally can't claim things on taxes for a year they weren't paid or incurred. Some things you can amortize, I think, but the general rule of thumb is take it the year it happened. This (supposedly) keeps people from stacking things and manipulating timing in order to affect taxes owed. This would mean amending your prior return. Assuming you have faith that your filing was otherwise correct, you don't stand to lose anything by amending it, and if you are confident in how to report it, you might be able to just amend it via whatever site you used to file it. I had to do this one year and it was no big deal.

 

[Miffy]

With some exceptions, you generally can't claim things on taxes for a year they weren't paid or incurred. Some things you can amortize, I think, but the general rule of thumb is take it the year it happened. This (supposedly) keeps people from stacking things and manipulating timing in order to affect taxes owed. This would mean amending your prior return. Assuming you have faith that your filing was otherwise correct, you don't stand to lose anything by amending it, and if you are confident in how to report it, you might be able to just amend it via whatever site you used to file it. I had to do this one year and it was no big deal.

But OP lacks the correct form to send along with the amended form. This is what troubles me, since even if they can absolutely prove that they paid for this, the school may not back them up.

 

[Princesca]

But OP lacks the correct form to send along with the amended form. This is what troubles me, since even if they can absolutely prove that they paid for this, the school may not back them up.

Yeah... though I would think the IRS would accept other proof of payment, such as an affidavit from the school attesting to the amt paid if OP can get that, or maybe a cancelled check or some other proof of payment. It cannot be an uncommon occurrence that people lose or end up missing certain tax forms.

I agree, a call to the IRS is a good idea regardless.

 

[Miffy]

Yeah... though I would think the IRS would accept other proof of payment, such as an affidavit from the school attesting to the amt paid if OP can get that, or maybe a cancelled check or some other proof of payment. It cannot be an uncommon occurrence that people lose or end up missing certain tax forms.

I agree, a call to the IRS is a good idea regardless.

Yes, totally agree.

 

[TAX GUY]

A 1098-T does NOT get attached to an original or amended tax return. It is NOT a required form. Your own proof of payment is enough to satisfy the expense should it be questioned. Depending on how this qualifies on the OP's tax return would then dictate what additional forms are required to be prepared with the original and/or an amended return.

You can do nothing, try it yourself to save some money or seek a professional to amend your returns (hopefully the proper way).

 

[Cheburashka]

But OP lacks the correct form to send along with the amended form. This is what troubles me, since even if they can absolutely prove that they paid for this, the school may not back them up.

I don't think the school not backing me up will be an issue. They don't deny anything, they're just refusing to help by providing a 1098-T. They even provided me a tuition statement that shows what I paid. It's really cut and dried. The money was only for tuition, and it was paid directly by me to the university and I have documentation of that (both their documentation and my bank records). They just didn't and won't provide me a 1098-T for it.

My not wanting to be audited is related to some valid, but difficult to justify (to a stranger) and document, dependent medical expenses that I claimed that year. It isn't because I can't document the tuition I paid.

I'm annoyed that a university representative misled me about this documentation. I would have simply filed it with last year's taxes if I had known. Now I'm clearly stuck having to amend a return. I will call IRS now and see what they have to say. I suspect that paying a professional won't be worth the money I save by amending the return.

 

[barkley]

I don't think the school not backing me up will be an issue. They don't deny anything, they're just refusing to help by providing a 1098-T. They even provided me a tuition statement that shows what I paid. It's really cut and dried. The money was only for tuition, and it was paid directly by me to the university and I have documentation of that (both their documentation and my bank records). They just didn't and won't provide me a 1098-T for it.

i was wondering about this b/c i know i could pull up my kid's payment history on their university's website. just a quick google search shows colleges are not required to issue a 1098-t so i suspect you could use the other proof of payment but check with a tax expert.

DO NOT claim it for the inappropriate year. my oldest, despite always correctly claiming, got audited on college expenses (the cpa in our college town said these audits surged during the pandemic and she and her peers suspected it was an intentional money grab on the part of the irs which believed college students were less likely to question/appeal). my oldest with the help of our cpa appealed-it took over a year and a half of us getting demand letters, sending the verifications, getting a letter saying the irs was experiencing delays in processing...before it was overturned. you do NOT want to deal with that-esp. if you know for a fact the tuition was for another tax year.

 

[Miffy]

I don't think the school not backing me up will be an issue. They don't deny anything, they're just refusing to help by providing a 1098-T. They even provided me a tuition statement that shows what I paid. It's really cut and dried. The money was only for tuition, and it was paid directly by me to the university and I have documentation of that (both their documentation and my bank records). They just didn't and won't provide me a 1098-T for it.

My not wanting to be audited is related to some valid, but difficult to justify (to a stranger) and document, dependent medical expenses that I claimed that year. It isn't because I can't document the tuition I paid.

I'm annoyed that a university representative misled me about this documentation. I would have simply filed it with last year's taxes if I had known. Now I'm clearly stuck having to amend a return. I will call IRS now and see what they have to say. I suspect that paying a professional won't be worth the money I save by amending the return.

Good luck to you. I hope you can resolve this with the help of an IRS rep on the phone.

 

[DLgal]

I'd just let it go. How much of a tax credit would you get from claiming it? Is it worth the hassle?

 

[_19disnA]

How much are we talking about? I know many years ago before tax software was available I used to do my tax returns manually. One year I messed up something (don't recall the exact details) and the IRS simply sent me a letter showing the amount should have been $X not $Y. I sent them a check for the amount in error and was never audited.

 

[DLgal]

How much are we talking about? I know many years ago before tax software was available I used to do my tax returns manually. One year I messed up something (don't recall the exact details) and the IRS simply sent me a letter showing the amount should have been $X not $Y. I sent them a check for the amount in error and was never audited.

It would be a credit, not an amount owed. When you pay for tuition, you can get educational credits. This is why she doesn't HAVE to fix it. She won't owe IRS more.

 

[TAX GUY]

I'd just let it go. How much of a tax credit would you get from claiming it? Is it worth the hassle?

If (s)he in fact qualifies for either of the education credits, it could be as much as $2500 credit. Personally, $2500 would be worth it to me, even if that means paying a professional a couple hundred dollars. Or, let it go and let the IRS keep it.