Deferred Student Loan on 1098T

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Genesis in La Crescenta, California

71 months ago

I received form 1098-T from University of Phoenix. Box-1 shows payment received $11,073, but it is a deferred student loan. Can I deduct this amount, using form 8863, when filing my tax returns?

There is also an amount in Box-5 Scholarships or grants $6,346, there's no where to put this on form 8863, do i just exclude it?

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thefinancewriter in Georgetown, Texas

49 months ago

Tax credits and deductions for higher education costs are not affected by payment of tuition with borrowed funds. (This is the same rule as every tax credit and deduction. Borrowing money for the amount of expenditures is irrelevant.) However, you cannot obtain tax credits or deductions for education expenses paid with scholarship funds. (You will repay borrowed money, but not scholarships.) Subtract the Box 5 figure from the Box 1 figure to determine the amount eligible for your education tax credit or deduction.

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