I am a first year graduate student (graduated from undergrad in spring of 2016) and my parents are claiming me as a dependent for 2016. I receive a taxable grant from my graduate school (money is used for room/board). On my 1098-T form, box 5 is ~$30,000 greater than box 2 (this is the money I pay taxes for). However, box 7 is also checked because $15,000 of that taxable income was paid to me in 2017. I would like to pay taxes only on the 2016 grant money and save the 2017 grant money taxes to be paid next year, when I will no longer be claimed as a dependent. Is this possible? If so, how do I record this information on my tax return. I am confused because the only way I could prove how much money was given in 2016 vs 2017 is by looking at the deposit receipts from my school.
It is true that if the school bills in December for classes that start the first 3 months of the next year, the student/taxpayer can:
Pay in 2016 and claim the expense on the 2016 tax year return
Pay in 2017 and claim the expense on the 2017 tax year return
Box 7 is checked if the school billed (Box 2) for classes starting in 2017.
The school should only report scholarships received (Box 5) for tax year 2016.
If, as you say, the scholarship was received by the school in 2017, you WOULD have the option of reporting it in 2017, but, if this is the case, the school reported your 2016 1098-T incorrectly. If the school did not get the scholarship until 2017, it should not have been reported on the 2016 1098-T.
You don't have the option of moving a scholarship PAID in 2016 to tax year 2017.
According to the IRS:
"Box 5. Scholarships or Grants
Enter the total amount of any scholarships or grants that you administered and processed during the calendar year for the payment of the student's costs of attendance."
"If you also pay qualified education expenses in both 2016 and 2017 for an academic period that begins in the first 3 months of 2017 and you receive tax-free educational assistance, or a refund, as described above, you may choose to reduce your qualified education expenses for 2017 instead of reducing your expenses for 2016."