1098-T box 1 blank, college not helping

[indycarfan]

Hello all, I need help with my 1098-T. I have called my school and looked at tons of posts on this forum from other years but am still confused. I will post as much information as I can.

This is my first time filing independently. I graduated in May of 2023. I have since been working full time. I was present all 4 years. My last semester was Spring of 2023. On my 2023 1098-T form, my box 1 is blank. My scholarship, $2000, is in box 5. However, I know that my scholarship didn't cover near what was necessary and paid out of pocket and with loans. Herein lies the issue.

On my student account portal, I see the charges here:

TUITION & FEES 5282 - DATE 12/1/22

ROOM & BOARD 4716 - DATE 12/2/22

(my payment) 3848.18 - DATE 1/3/23

Loans 3711 - DATE 1/9/23

(my payment) 6.82 - DATE 1/9/23

SCHOLARSHIP: 2000 - DATE: 4/19/23

As you can see, the charges were POSTED in 2022. I PAID in 2023.

NOTE: My school does everything by account balance and not individual expense I believe. Meaning I am not paying specifically tuition or room and board, and my scholarship is not SPECIFICALLY for tuition or room and board. They told me my scholarship is a credit on the account and again not specifically for room and board or tuition.

My school is telling me that even though the CHARGES were in 2022, and I paid in 2023, those payments are being applied to the 2022 amount and therefore this is why I have nothing in my 2023 1098-T box 1. When I protested and said what I am PAYING in 2023 isn't being reported correctly because I think this is what should be in box 1, they repeated themselves.

I am confused and frustrated. Either my school is screwing me and not reporting the amount I paid, or the IRS is screwing me because of how it is reported. Neither is surprising. I just need help because I would really like to not owe taxes on a NEED BASED scholarship. But I also don't want to screw up and get audited.

I am grateful for any responses. Thank you so much.

[Hal_Al]

Q. 1098-T box 1 blank, college not helping?

A. based on multiple posts, in this forum, you're not gonna convince the school they're wrong. You just have to deal with it. 

The good news is that is easy.  And based on your description, you would be correct to do so. 

The 1098-T is only an informational document. The numbers on it are not required to be entered onto your tax return. However receipt of a 1098-T frequently means you are either eligible for a tuition credit or possibly your student has taxable scholarship income. 

If you claim the tuition credit, you do need to report that you got one or that you qualify for an exception (the TurboTax interview will handle this)

You claim the tuition credit, or report scholarship income, based on your own financial records, not the 1098-T. In the 1098-T screen, click on the link "What if this is not what I paid the school" underneath box 1. You will then be able to enter the actual amounts paid. You will also reach a screen that allows you to adjust the scholarship amount for "amounts not awarded for 2023 expenses".

Or if you find it easier, just change the numbers in boxes 1& 5 to what your records show. The 1098-T that you enter in TT is not sent to the IRS.

[indycarfan]

Thank you @Hal_Al. Just to confirm, when you say "In the 1098-T screen, click on the link "What if this is not what I paid the school" underneath box 1. You will then be able to enter the actual amounts paid. You will also reach a screen that allows you to adjust the scholarship amount for "amounts not awarded for 2023 expenses".".

This only includes the $ amount I paid for tuition, correct? Not for room and board. The issue is that I have no way of knowing what of my money went to tuition, and what went to room and board. Same for the money in the scholarship.

Additionally, this does not include what the student loans paid correct? Meaning in this example, I should ignore those. 

[Hal_Al]

What are you trying to accomplish? Claim a tuition credit? Determine the taxable amount of your scholarship? Both? Something else?

Q. This only includes the $ amount I paid for tuition, correct? Not for room and board.

A. Yes. R&B are never included in box 1 (yes, schools occasionally put R&B in box 1 by mistake)

Q. The issue is that I have no way of knowing what of my money went to tuition, and what went to room and board (R&B). Same for the money in the scholarship?

A. You should have statements from the school for these.  But, you don't need to know where what money went, you only need to that expenses were paid. 

Q. Additionally, this does not include what the student loans paid correct? 

A. You don't care what the student loans paid.  All you care about is allocating expenses to scholarships or not scholarship.

Q. Meaning in this example, I should ignore those (loans)?

A. I'm not seeing an example. Loan money is considered your money. Anything paid by loans is considered paid by you.  

But you don't need to know what money paid what expenses (unless some of the scholarship is "restricted"). For tax purposes, you are allowed to allocate the expenses where needed.

So, for specific, help I need to know how much was paid for tuition, fees, books and other course materials in 2023 and the amount of the 2023 scholarship.  Don't need R&B numbers, loan numbers or what you paid. 

[indycarfan]

I believe I am trying to claim the American Opportunity tax credit. I also think I am trying to figure out the taxable amount of scholarship, hence my confusion with not knowing what money was allocated where.

The numbers:

TUITION & FEES - $5282

Books & course materials - $0. I did not need to buy anything that semester.

The scholarship is not restricted as far as I am aware. I haven't heard or seen anything like that nor did my school tell me that.

[Hal_Al]

What are you trying to accomplish?  I'll assume Claim a tuition credit.

Tuition $5282. Scholarship $2000.

That means you had $3282 net expenses for the American Opportunity credit (AOC) (assuming you were an undergrad) . That will get you $2320 of the maximum $2500 credit.  Just enter $5282 in box 1 and $2000 in box 5 at the 1098-T screen and follow the interview to qualify you. You don't need to enter any other numbers. $928 of the AOC will be refundable. The rest can only be used to offset an actual tax liability. 

To get the maximum $2500 AOC ($1000 refundable) you'll need to declare $718 of your scholarship as taxable (you reduce the tuition amount  allocated to the scholarship to increase the tuition amount allocated to the AOC from $2320 to $4000).  To do this, you tell TurboTax that $718 of the scholarship was used for room and board. Note the wording at that screen “or other expenses”. You didn’t have to literally use the scholarship for R&B.  The scholarship income will go on line 8r of Schedule 1.

Graduating in May, usually means that 2023 was your 5th calendar year of college, There is a 4 time limit for claiming the AOC. Be sure your parents didn't already claim the AOC 4 times in the past on your education (you said "This is my first time filing independently").

[AmyC]

You will enter the $5282 for tuition and fees as stated above. You need $4,000 for the full AOTC. The scholarship is $2,000 and now you have the option to claim.......thinking 5282-4000 =1282 of the scholarship went towards room and board. This gives you the best advantage with the full education credit and minimal income of $1282 from the scholarship.

[indycarfan]

@AmyC @Hal_Al Thank you so much for your help with this.

My only concern now is potential issues later in the year with an audit or something, because what I reported as my tuition and fees is not what was sent to me in the box 1 on the 1098-T (the point of this thread). I was not actually eligible for the AOC because it has been claimed 4 times (thanks Hal_AI) but I do seem eligible for the Lifetime Learning Credit. Again, my school is saying they are correct on their end even though I PAID that money in calendar year 2023. And they charged me in 2022.

If that happens, I just show the IRS that I did in fact pay right? With records from my college?

[Hal_Al]

Q. If that happens, I just show the IRS that I did in fact pay right? With records from my college?

A. Yes.  We have not seen a single case, in this forum, where the IRS held the taxpayer to the 1098-T amounts. 

The lifetime Learning Credit (LLC) is 20% of tuition (up to $10K). So 20% x  $3282 = $656. None of it is refundable. If you declare the $2000 scholarship as taxable, it's $5282 x 20% = $1056. Assuming you're in the 12% bracket, the tax on the $2000 scholarship is $240. So, you come out $160 ahead.