Why do I suddenly have to pay to file my taxes? What qualifies the student loan tax break (1098-T) as 'not simple'?

Forum|Forum|2 years ago
February 7, 2024
2 replies
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In the 'Review' section, it told me that because filing my student loan tax breaks (1098-T), my taxes are not qualified as 'Simple' (whatever that means) and that I'm forced to pay. This was further reiterated in the payment section by way of claiming that I'm somehow ineligible to pay with my refund. Explain the grift.

TurboTax Deluxe Online

Best answer by duckboy416

The Free Edition can only be used for "simple" returns that do not require extra forms or schedules. If you enter something that is not supported by the Free Edition, you are prompted to upgrade to a paid version.

When you chose to “start” in the Free Edition —

Directly below the words “Free Edition” there is a blue link that says “For simple tax returns only” If you click that link it brings up this information:

You can file with TurboTax Free Edition if you have a simple tax return.*

*A simple tax return is Form 1040 only.

Situations covered in TurboTax Free Edition include:

W-2 income
Limited interest and dividend income reported on a 1099-INT or 1099-DIV
Claiming the standard deduction
Earned Income Tax Credit (EIC)
Child tax credits
Student Loan Interest deduction

Situations not covered in TurboTax Free Edition include:

Itemized deductions
Unemployment income reported on a 1099-G
Business or 1099-NEC income
Stock sales
Rental property income
Credits, deductions and income reported on schedules 1-3

Use this IRS site for other ways to file for free. There are 8 free software versions available from the IRS Free File site

https://apps.irs.gov/app/freeFile/

Guess I'm not filing my taxes this year, then. **bleep** tubotax and **bleep** you. I wish the IRS all the best in their efforts to legislate this company out of existence. May it burn to the ground, and you along with them.

xmasbaby0

Employee

A 1098T is not issued for student loan interest. If you paid student loan interest you get a 1098E.

What did you enter? If you entered a 1098T you must have been trying to enter an education credit like American Opportunity or Lifetime Learning Credit---which are not supported by the Free Edition.

**Disclaimer: Every effort has been made to offer the most correct information possible. The poster disclaims any legal responsibility for the accuracy of the information that is contained in this post.**

duckboy416Author

Why isn't it supported?

xmasbaby0

Employee

When you chose to “start” in the Free Edition —

Directly below the words “Free Edition” there is a blue link that says “For simple tax returns only” If you click that link it brings up this information:

You can file with TurboTax Free Edition if you have a simple tax return.*

*A simple tax return is Form 1040 only.

Situations covered in TurboTax Free Edition include:

W-2 income
Limited interest and dividend income reported on a 1099-INT or 1099-DIV
Claiming the standard deduction
Earned Income Tax Credit (EIC)
Child tax credits
Student Loan Interest deduction

Situations not covered in TurboTax Free Edition include:

Itemized deductions
Unemployment income reported on a 1099-G
Business or 1099-NEC income
Stock sales
Rental property income
Credits, deductions and income reported on schedules 1-3

Use this IRS site for other ways to file for free. There are 8 free software versions available from the IRS Free File site

https://apps.irs.gov/app/freeFile/

Hal_Al

Employee

Q. What qualifies the student loan tax break (1098-T) as 'not simple'?

A. TurboTax says so. It's that simple: you no longer have a "simple return" by their standrd.

But, maybe you should not be claiming a "student loan tax break (1098-T)". If you are a dependent, it's your parents that file your 1098-T to claim a tuition credit. You would file the 1098-T if your scholarships (box 5) exceed your tuition (box 1). If that is the case, reply back for more advice.

duckboy416Author

My parents refuse to claim me as a dependent even though I live with them, and my tuition was higher than my scholarships.

Hal_Al

Employee

My parents REFUSE to claim me as a dependent even though I live with them.

The usual reason for that is the parent's income is too high to qualify for the tuition credit, so they think they can let the student claim the credit on his/her return. That usually doesn't work.

While technically there is a provision that allows a student-dependent to claim a federal tuition credit, from a practical matter it seldom works out. A student, under age 24, is only eligible for the refundable portion of the American Opportunity Credit (AOTC) if he/she supports himself by working. She cannot be supporting herself on student loans & grants and 529 plans and parental support. It is usually best if the parent claims that credit.

If the student actually has a tax liability, there is a provision to allow him to claim a non-refundable tuition credit. But then the parent must forgo claiming the student as a dependent, and the $500 other dependent credit. The student must still indicate that he can be claimed as a dependent, on his return. This is worth up to $2500 (AOTC shifts to all non refundable)