How to File Form 1098-T (Maximize Your Refund)
Got a confusing form from your college that looks like random numbers? Don’t throw it away. This is Form 1098-T, and it is the golden ticket to claiming your $2,500 Education Credit. Here is how to read it without a degree in accounting.
Decoding the Form: Only 2 Boxes Matter
The form has 10 boxes, but you can ignore most of them. Focus on the battle between Box 1 and Box 5.
| Box Number | Meaning | Impact on Refund |
|---|---|---|
| Box 1 | Payments Received | Increases Credit (+) |
| Box 5 | Scholarships/Grants | Decreases Credit (-) |
| Box 2 | Billed Amount | Usually Empty* |
| Total Qualified Exp. | $4,500 |
|---|
How to Enter on TurboTax / H&R Block
Don’t just auto-import and click “Next.” Follow these steps to maximize the refund.
1. Find the “Education” Section
Go to Deductions & Credits > Education > Expenses and Scholarships (Form 1098-T).
2. Enter the EIN
Type in the school’s Tax ID (EIN) found on the form.
3. Enter Box 1 and Box 5 Exactly
Copy the numbers exactly as they appear on the paper.
4. The Secret Step: “Did you pay for books?”
The software will eventually ask: “Did [Student Name] pay for books or materials required for school?”
SAY YES.
This is where you enter the receipts for Amazon textbooks, lab equipment, or clickers. The 1098-T does NOT track this, but the AOTC credit allows it! This can add hundreds to your refund.
Pro Tip: The “December vs January” Trap
The IRS runs on a calendar year (Jan 1 – Dec 31). Schools run on Academic Years. This causes chaos.
When did you swipe the card?
If the 1098-T looks wrong (e.g., Box 1 is too low), check your bank statement dates. You claim the credit in the year the money left your bank account, regardless of what the semester is called.