Do you need to file IRS Form 8863? This form is used by individuals and businesses to report certain information about their education credits. You must understand what this form is and how to complete it correctly, or you could face penalties from the IRS. In this post, we will provide an overview of IRS Form 8863 and explain how to complete it accurately. We’ll also discuss common mistakes that taxpayers make when filing this form. Let’s get started!
What Is IRS Form 8863?
IRS Form 8863 is the form used to claim the Education Credits. The Education Credits include the American opportunity credit and the lifetime learning credit. You may claim these credits if you, your spouse, or a dependent are enrolled in eligible educational institutions. You must have paid qualified educational expenses to be eligible for these credits.
Who Needs To Fill IRS Form 8863?
- The IRS Form 8863 is used to claim education credits. These credits can include the American Opportunity Tax Credit, the Lifetime Learning Credit, and the Hope Scholarship Credit.
- To be eligible for these credits, you must be enrolled in an eligible educational program at an accredited school. In addition, you must be paying tuition and other related expenses.
- You will also need to have your 1098-T form from your school to complete the IRS Form 8863.
- If you are claiming the American Opportunity Tax Credit, you must also have completed 2009 through 2018 as your first four years of post-secondary education.
- For the Lifetime Learning Credit, you (or your spouse) must be attending college or career school to acquire or improve job skills.
- Lastly, if you are claiming the Hope Scholarship Credit, you (or your dependent) must be enrolled in at least half-time status at an eligible educational institution.
- Once you have gathered all of the necessary information, you will be able to complete and submit the IRS Form 8863.
How To Fill IRS Form 8863?
The IRS Form 8863 is used to claim the Education Credits. This step-by-step guide will help you fill out the IRS Form 8863:
- The first step is to enter your personal information. This includes your name, Social Security number, and date of birth.
- Next, you’ll need to provide information about your taxes. This includes your filing status, the number of dependents you have, and your total income.
- Then, you’ll need to enter information about your education expenses. This includes tuition, fees, and other costs associated with your education.
- Finally, you’ll need to sign and date the form. Once you’ve completed all the steps, you can submit the form to the IRS.
What Are The Common Mistakes That You Should Avoid?
Here are some mistakes that you should avoid while filling out this form:
#1 Do Not Forget To Sign And Date The Form
- Failing to properly sign and date your Form 8863 can result in the form being rejected by the IRS. The form must be signed and dated by the taxpayer for it to be processed. The date should be in mm/dd/yyyy format and should be entered in the box labeled “Date.”
- The form will also need to be signed by the preparer if the taxpayer used a paid preparer. The signature of the paid preparer goes in the box labeled “Paid Preparer Use Only.” The preparer must also enter their Preparer Tax Identification Number (PTIN) in this box.
#2 Make Sure All Social Security Numbers Are Entered Correctly
- While filling out your IRS Form 8863, it is important to make sure that all Social Security numbers are entered correctly. Incorrect Social Security numbers can cause delays in processing and may result in you owing interest and penalties.
- If you’re not sure whether or not a Social Security number is valid, you can check with the Social Security Administration. They will be able to tell you if the number is valid or not.
#3 Enter The Correct Amount Of Eligible Expenses
- When you’re filling out your IRS Form 8863, it’s important to make sure that you enter the correct amount of eligible expenses. Eligible expenses include things like tuition and fees, books and supplies, and room and board.
- If you’re not sure whether or not an expense is eligible, you can check the instructions for Form 8863. Remember, if you enter an incorrect amount on your Form 8863, you may end up paying more taxes than you owe. So it’s worth taking the time to double-check your work.
#4 Include All Required Documentation
- When you file your taxes, you want to make sure that you include all of the required documentation. This includes Form 8863, which is used to claim the Education Credits. To ensure that your form is complete, be sure to include all schedules and worksheets that are required by the form.
- In addition, be sure to include any supporting documentation that is required. This may include transcripts, 1098-E forms, or other financial documents. By including all required documents, you can be sure that your tax return will be complete and accurate.
#5 Do Not Wait Until The Last Minute To File
- Some taxpayers wait until the last minute to file their taxes, and as a result, they may miss the deadline for filing Form 8863. If Form 8863 is not filed by the tax return due date, the taxpayer will not be able to claim the education tax credits.
- To avoid this problem, taxpayers should ensure that they complete and file Form 8863 well in advance of the tax return due date. By taking this step, taxpayers can be sure that they will not miss out on claiming these valuable credits.
If you’re paying for college out of pocket, be sure to claim the credits on Form 8863. And if you have any questions about how to do that or which other education-related tax breaks might apply to your situation, consult a tax professional. The rules around education deductions and credits can be complicated, but with a little help, you can make sure you get the most benefit possible from Uncle Sam. Thanks for reading!