1098T for college freshman shows $$ for Fall 2024 AND Spring 2025

[khallock78]

I'm confused. My daughter is 19 and was a college freshman starting in August 2024. We got a 1098T form from her college. It showed $34k in tuition that I paid and some student loans (like $5500) and $54k in scholarships (tuition only). But approximately 1/2 of those amounts was for the semester starting in January 2025. Do I just go with the amounts on the form? 

[AmyC]

I am going to assume you are saying that box 1 is for fall only and box 5 is fall and spring. The program allows you to reduce the box 5 scholarship for just the fall. You have to remember to adjust it back up next year to compensate.

The next issue is to determine if you qualify for a college credit. 

• See if you qualify,  What You Need to Know about AOTC and LLC.
• If you qualify, you want to claim that $4,000 of the tuition was paid by you.
• That leaves $30,000 to be covered by scholarships.
• The IRS has a great brochure that explains how scholarships and tax credits interact.
• Your student will claim the scholarship income not used towards that $30k. This may not even be taxable to the student while you get a nice break.

Student loans are not part of credit calculation. If you have paid interest, that is entered under student loan interest.

If you mean box 1 and box 5 contain fall and spring, that is fine and nothing needs to be adjusted.

[khallock78]

Box 1 says $34,000. This is the total that we paid for Fall and Spring between cash and her federal student loans ($5500).

Box 5 shows a $54,000 scholarship that was the total scholarship for the entire year ($26k each semester).

Altogether I paid $27,413. My daughter's federal student loans paid $5500. This is the combination of Fall 2024 and Spring 2025. Her school was around $88,000/year without aid. There was no leftover scholarship income. She didnt receive any money. The tuition is $66,000/year and she got a scholarship for $54,000 of that. We had to pay the remaining $12k + room/board/fees.

I was just confused because its all on a 2024 tax form, but basically 1/2 of it was for 2025.

[KrisD15]

Everything (as far as taxes goes) is based on what happened in 2024. 

In 2024, you can pay for classes that are in 2024 and/or the first three months of 2025. 

What matters is what was paid. 

The school reports Form 1098-T.

Box 1 is what was paid to the school for tuition and fees. (NOT what was billed)

Box 5 is scholarships that went through the school in the name of the student.

Your 1098-T is saying that the school was paid 34,000 in 2024 and that 54,000 scholarships posted in 2024. 34,000 paid in 2024 could be for classes in 2024 and/or classes for the first three months of 2025. 

This indicates that the student got 20,000 more in scholarships than what was paid to the school in 2024.

We don't talk about student loans or room and board.

Why do you say her school was around 88,000? Box 1 is 34,000.

Are you adding Room and Board? Room and board can offset a 529 distribution (1099-Q) but not scholarships and can't be used towards a credit. 

Why do you say tuition was 66,000? 

You said 

"Box 1 says $34,000. This is the total that we paid for Fall and Spring between cash and her federal student loans ($5500)."

The numbers you give are quite confusing, 
I tend to agree with Amy that perhaps the confusion is that some of the scholarship posted before the school was paid for the 2025 classes?
But you say there was no money left, so unless the school hung onto the scholarship for the next year, that theory doesn't make sense either. 
I suggest you look at the 1098-T and the students school statement. Try to match tuition BILLED with tuition PAID to scholarships that posted. 
Student loans don't really factor in at this point. When school loan payments are made, the interest might be deductible, but that will probably be later. 
Room and Board expenses don't really matter. Using scholarships to pay room and board makes the scholarships taxable income. Only when used for tuition, fees, books and supplies do scholarships not get taxed.
 

The student may have additional education expenses that do offset scholarships but are not listed on Form 1098-T such as books and supplies. TurboTax asks for those additional expenses after you enter Form 1098-T.

IRS Pub 970 is somewhat easy to read and might make things clearer. They have a lot of good examples. 

Also, don't hesitate to ask for a meeting with someone with the school Financial Aid office. They know how these expenses and scholarships work and can explain it a lot better than we can. It's what they're there for. 

If the student received scholarships that were not spent on Tuition, Fees, Books or Supplies, the student will need to claim that amount as income on their federal tax return. 

[Hal_Al]

Q. Do I just go with the amounts on the form? 

A. No. 

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 2024 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.