Open TurboTax

Why sign in to the Community?

  • Submit a question
  • Check your notifications
or and start working on your taxes
Announcements
Your taxes, your way. Get expert help or do it yourself. >> Get started
Close icon
Do you have a TurboTax Online account?

We'll help you get started or pick up where you left off.

cancel
Showing results for 
Search instead for 
Did you mean: 
WGray8267
Level 2

Form 1098t is showing a different amount in box 1 than what my school recieved

Hello, I'm a student and recieved my 1098-t form today and am a little confused by the amounts reported in box one and five.

Both boxes show the amount $6670. From what I've read online, this means that the amounts cancel out and I do not owe taxes and do not qualify for credit.

The problem with this is that on my school website, it shows that I only paid $5563 for my tuition and expenses during the year and recieved grants & scholarship amounts of $6670. This means I have recieved refunds of $1107. I know I used $379 of these refunds to buy my books, but that leaves $728 as a taxable amount.

Am I missing something, or is this form not showing my tax liability? Do I need to report the $728 regardless of the information on the form?

  •  
  • Thanks in advance!
1 Best answer

Accepted Solutions
Hal_Al
Level 15

Form 1098t is showing a different amount in box 1 than what my school recieved

Q.  Do I need to report the $728 regardless of the information on the form?

A.  Technically, yes.

But, it depends on more details.  What other income do you have. Generally, you do not need to file a tax return if you have less than $12,400 of total income (there are exceptions for dependents with unearned income).

 

It sounds like your school is trying to protect you by assuming you used all the difference for qualified expenses and put the box 5 amount in box 1.  Generally a computer purchase is also a qualified expense.

 

The 1098-T is only an informational document. The numbers on it are not required to be entered onto your tax return. 

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. 

_________________________________________________________________________________

FYI

 There is a tax “loophole” available. The student reports all his scholarship, up to the amount needed to claim the American opportunity credit, as income on his return. That way, the parents  (or himself, if he is not a dependent) can claim the tuition credit on their return. They can do this because that much tuition was no longer paid by "tax free" scholarship.  You cannot do this if the school’s billing statement specifically shows the scholarships being applied to tuition or if the conditions of the grant are that it be used to pay for qualified expenses.

Using an example: Student has $10,000 in box 5 of the 1098-T and $8000 in box 1. At first glance he/she has $2000 of taxable income and nobody can claim the American opportunity credit. But if she reports $6000 as income on her return, the parents can claim $4000 of qualified expenses on their return.

 

 

View solution in original post

4 Replies
Hal_Al
Level 15

Form 1098t is showing a different amount in box 1 than what my school recieved

Q.  Do I need to report the $728 regardless of the information on the form?

A.  Technically, yes.

But, it depends on more details.  What other income do you have. Generally, you do not need to file a tax return if you have less than $12,400 of total income (there are exceptions for dependents with unearned income).

 

It sounds like your school is trying to protect you by assuming you used all the difference for qualified expenses and put the box 5 amount in box 1.  Generally a computer purchase is also a qualified expense.

 

The 1098-T is only an informational document. The numbers on it are not required to be entered onto your tax return. 

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. 

_________________________________________________________________________________

FYI

 There is a tax “loophole” available. The student reports all his scholarship, up to the amount needed to claim the American opportunity credit, as income on his return. That way, the parents  (or himself, if he is not a dependent) can claim the tuition credit on their return. They can do this because that much tuition was no longer paid by "tax free" scholarship.  You cannot do this if the school’s billing statement specifically shows the scholarships being applied to tuition or if the conditions of the grant are that it be used to pay for qualified expenses.

Using an example: Student has $10,000 in box 5 of the 1098-T and $8000 in box 1. At first glance he/she has $2000 of taxable income and nobody can claim the American opportunity credit. But if she reports $6000 as income on her return, the parents can claim $4000 of qualified expenses on their return.

 

 

WGray8267
Level 2

Form 1098t is showing a different amount in box 1 than what my school recieved

Thank you so much for your detailed response! 

 

To answer your question, the only other income I have is from 1099-int and misc forms which do not reach the $12,400 amount. I had been told previously that I would need to file regardless and was unaware that this may be unnecessary due to my low income. Thank you for bringing this to my attention. 

 

In the case that I would need to file this return, I had done some more reading on this document on TurboTax and found a section in the "Scholarships & Grants" category which allowed me to enter my unqualified expenses. (I believe this section mentioned something in regards to "room and boards").

In this area, I entered the amount of $728 which was spent on these unqualified expenses. This was deducted from the $6670 I recieved in Pell Grants provided to the university and left a total which entirely covered my tuition, fees, and textbooks.

 

You mentioned that I may also be able to change the amount on box 1 to enter the actual amounts paid directly to the university. Would this be the better option? It seems that either of these methods may allow me to include and report my taxable income.

 

Thank you again for this information and for your time.

 

Hal_Al
Level 15

Form 1098t is showing a different amount in box 1 than what my school recieved

Either way will get you the same result, but don't do both.

 

The result should be $728 added to line 1 of form 1040 with the notation SCH

WGray8267
Level 2

Form 1098t is showing a different amount in box 1 than what my school recieved

Great! I will check for this result when I file to ensure it is entered correctly.

Thank you so much for the help and have a wonderful day!

About Community

Learn about taxes, budgeting, saving, borrowing, reducing debt, investing, and planning for retirement.

3.48m
Members

2.61m
Discussions

Manage cookies
v