Why it matters
The form supports education credits, such as the American Opportunity Credit or the Lifetime Learning Credit. The taxpayer needs the form and the records of the expenses, because the form may not include every qualifying cost.
Example
A client pays tuition for a dependent's first year of college. The school sends Form 1098-T, and the preparer uses it with the payment records to calculate the education credit.
Related terms
Questions about Form 1098-T
Does Form 1098-T show every qualified expense?
No. It reports what the school received for tuition and related expenses, but books, supplies and some other costs may not appear. Keep the receipts for those items.
Can a taxpayer claim a credit without Form 1098-T?
The taxpayer can use other records, but the form is the primary support. If it is missing, ask the school for a copy before filing.