1098-T

[Buffalochip]

The 1098-T I received for my son's college education lists tuition payments & scholarships on a calendar year basis.  However, since I've been paying the spring term tuition prior to December 31st for the whole of his college experience, I have been accounting for Box 1 and Box 5 amounts on a school year basis (Sept through August).  Based on a posted response to a prior TurboTax question from someone else, I should enter the Box 1 amount as it is stated on the 1098-T even if that is not what I paid.  There is a drop down box associated with Box 1 that then allows me to enter the amount I actually  paid in tuition.  So far, no problem.  However, like the incorrect Box 1 value, the Box 5 value is incorrect.  There is no drop down box associated with Box 5 that would allow me to enter the amount of scholarships received on the same Sept - Aug time period as tuition payments.  The net effect is that it appears that I received far more scholarship monies than I received.  I could compensate for this by entering a Box 5 amount that is different from that on the 1098-T form, an amount that actually corresponds to the scholarships I've received.  However, it should be possible to enter the correct amount without doing this.  Is there another way?

[CatinaT1]

You should be reporting the tuition paid and scholarships received on a calendar basis, not on a school year basis.  You are only allowed to account for amounts paid during the tax year, regardless of the school calendar.  This is how the school is reporting their information to you and the IRS is receiving this information also.

[Buffalochip]

I understand your response; however, for the AOTC, IRS Publication 970 allows one to prepay expenses for the academic period that starts in the first 3 months of the subsequent year and claim that academic periods expenses as if they were incurred during the prior year (Chapter 2, 3rd paragraph (last section on page 12) of heading entitled Who Can Claim the Credit.  Further, under Adjustments  to Qualified Education Expenses - Refunds, it allows refunds paid on behalf of the student to be claimed on the prior year taxes if the refund is paid before the tax return is filed (page 15).  Together, this leads me to believe that if I pay the expenses for the academic period starting in Jan - Mar of the following year prior to Dec 31st and I do not submit my tax return until the refunds for that same period are credited, then I can treat that period as if it took place the prior year.  Please let me know if this is an incorrect interpretation.

[KrisD15]

The credit is based on what was paid to the school. 

That should be in box 1. 

If you paid 10,000 in December 2019, that will be included in Box 1

If the scholarship for that period posted the next year in 2020, subtract that amount from box 1 and don't count it as income for 2020.

Keep good records using the 1098-T and the students yearly statement. 

"Refunds received after 2019 but before your income tax return is filed. If anyone receives a refund after 2019 of qualified education expenses paid on behalf of a student in 2019 and the refund is paid before you file an income tax return for 2019, the amount of qualified education expenses for 2019 is reduced by the amount of the refund."