There are three different tax breaks that might help you.
- Tuition and Fees. Required document is 1098-T. In addition to the tuition and fees, I will need the name, address and Tax ID number of the school. Unfortunately, the student is the one who gets the 1098-T – not the parent! If they lost it – they will need to go to www.1098T.com.
- Other expenses. If your student doesn’t already have a degree you can deduct books, supplies, special software, maybe even their computer. Be sure to get all related costs from your student.
- College Saving Plans. Did you use a Section 529 Plan or a “Coverdell Savings Accounts” to help pay for the costs? If so, you will be receiving IRS Form 1099-Q. Your money grew – tax free. We will need to show that the funds were used for “qualified expenses” otherwise you will be taxed now. You also might subject to a penalty – so your tax preparer will need records of any and all costs.
- Youngster’s Tax Returns. If the student is your child, I can run what is called a “Kiddie Tax”. Make sure your child does not file their own return until we’ve gone over the rules.
Source: Tax News & Tips, Year End 2013