1098T is a tuition statement.
The net amount
Box 1 minus box 4 is the payments made by you for education.
See the instructions for Form 1040
, line 34, on page 34, or line 50, on page 40(FORM 1040 instructions) , and the instructions on Form 1098-T at this link
This is a brief explanation of the EDUCATION CREDIT
There are three tax benefits
for college education expenses: the tuition and fees tax deduction
(Form 1040, line 27), the Hope Credit
, and the Lifetime Learning Credit. The Tuition and Fees deduction reduces taxable income
. The Hope Credit and Lifetime Learning Credit, however, provides a tax credit based on a percentage of your qualified college expenses. Generally, taking a tax credit will provide a greater benefit than a deduction. The education tax credits are calculated on Form 8863 (PDF).
The Hope Credit is a tax credit for college students in their first two years of college. It provides a tax credit of up to $1,500 on the first $2,000 of college tuition and fees You can claim the Hope Credit on your tax return
if you, your spouse, or your dependent
are a first-year or second-year college student, is enrolled at least half-time at an eligible education institution, and you were responsible for paying college expenses.
Lifetime Learning Credit
The Lifetime Learning Credit is a tax credit for any person who takes college classes. It provides a tax credit of up to $2,000 on the first $10,000 of college tuition and fees. You can claim the Lifetime Learning Credit on your tax return if you, your spouse, or your dependents are enrolled at an eligible educational institution and you were responsible for paying college expenses. Unlike the Hope Credit, you need not be enrolled at least half-time. Even if you took only one class, you may take advantage of the Lifetime Learning Credit.
Let me know if you have any question.
Please note: This advice is provided with the understanding that all the relevant facts have been provided by you. Any change in facts might affect the advice given and hence may not be relied on in such cases.