I have a full scholarship to my graduate program and I am also receiving stipend. This is a "fellowship" year so I am not working for the stipend.
The 1098-T form has box 1 and box 5 matching. The problem is that I am not sure if I need to pay tax on the stipend. The 1098-T form seems to be including the stipend as part of tuition and related expenses.
Say, tuition is $10k and the stipend is $5k. The total in box 1 is $15k. The total in box 5 is also $15k.
So, do I or do I not report the stipend as income?
A stipend is not considered taxable if used for eligible expenses. Income above that -like those used for room and board, would be taxable.
Your form shows box 1 and box 5 matching which would have no tax consequence to you.
I'm wondering if the university reported this incorrectly?
I am receiving the stipend to my personal checking account. I receive it as direct bank transfer. It should not be included as part of tuition and related expenses. Knowing this, do I report it as gross income?
Q. I'm wondering if the university reported this incorrectly?
A. Could be. That does happen.
Q. It should not be included as part of tuition and related expenses. Knowing this, do I report it as gross income?
A. It kinda depends on do you "think' it's that way or do you "know" it's that way. It kinda sounds like they were trying to help you by reporting it that way.
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 you have taxable scholarship income. 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.
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.
What do you mean they were trying to help me? As in, they reported it in a way to avoid it being taxable?
So, there should be no problem if what I report does not directly match the 1098-T?