Skip to main content

Tuition Statement Changes in Place for 2016

By Anonymous
Question:

My daughter is in college. I heard that Form 1098-T for 2016 may report college tuition differently. Is this true?

Answer:

The IRS has released the new 1098-T with several changes for 2016. According to the 2016 IRS instructions, institutions may no longer report the amounts billed for qualified tuition and related expenses, previously shown in box 2 of form 1098-T. Public Law 114-113, Division Q, section 212, now requires institutions to report only the amounts actually paid for qualified tuition.

Additionally, a new box has been added to the Student’s taxpayer identification box. According to the IRS, this box must be checked by the issuing educational institution “under penalty of perjury that you have complied with the standards promulgated by the secretary for obtaining the student’s TIN.”

The PATH Act of 2015 included this required change for 1098-T reporting.

***Update: The IRS issued Announcement 2016-17 on April 27, 2016, providing a limited penalty relief. Filers of Form 1098-T for 2016 may still report the amount billed for qualified tuition, rather than the payments received. This penalty relief does not apply to 2017 or beyond. 
Labels:

Comments

Post a Comment

Popular posts from this blog

Rental of a Church Parsonage to a Non-Minister

By
Question: A church owns a parsonage, but the pastor does not use it as he owns his own home. The church rents the parsonage to a tenant other than a minister or employee of the church. Will the church be responsible for paying income tax on these monies as Unrelated Business Income (filing a Form 990-T) even if the money is used to carry on the business of the church? Answer: Whether the money is used for church purposes is irrelevant.  IRS Publication 598  states: "If an exempt organization regularly carries on a trade or business not substantially related to its exempt purpose, except that it provides funds to carry out that purpose, the organization is subject to tax on its income from that unrelated trade or business." Fortunately, in the case of rental income from real property, such income is "excluded in computing unrelated business taxable income" (Publication 598). Caution: see content below regarding debt-financed property.  However, a second concern not a...
Post a Comment
Read more

How can my ministry expenses be covered by the church?

By
     How can my ministry expenses be covered?                            Many ministers use their personal autos for ministry purposes. Their employers can reimburse these costs using a standard mileage rate published by the IRS. The per mile rate represents employees’ entire reimbursable cost other than highway tolls and parking tabs. If not covered by use of the ministries’ credit card, other costs can be reimbursed as well—business and travel meals, lodging, office supplies, and professional library purchases among them. Some ministries reimburse travel costs using per-diems published by the IRS. If employee business expenses are not reimbursed, the personal tax deduction benefit to the individual minister is severely limited. Non-taxable reimbursements after documentation is provided to the employer follows IRS rules for accountable plans. Non-taxable cash advances before expenses are in...
Post a Comment
Read more

What is the best retirement account for a Minister?

By
       What are my options for retirement savings?                  Regardless of options, start now! You probably have learned about traditional and Roth IRAs. We have often found them well short of the benefits we will share here regarding Internal Revenue Code section 403(b) plans. These plans must be established by your employer (although you might need to be the initiator). They are funded in two ways—withholding from your paycheck at your option (called “elective deferrals”) and as initiated by the employer (matching or non-elective contributions). These contributions not only save income tax, but they also reduce the income you must report as subject to the 15.3% SECA tax. Further, at retirement with the cooperation of your church or Christian ministry the distributions to you can be tax-free to the extent of your qualified housing expenses. Many ministries also adopt what are often called “FICA alternative” be...
Post a Comment
Read more