1098T increases tax owed

[tomtom2345]

My wife's 1098-T listing $1120 in Box 1, $75 in Box 5, and Box 8 checked. She paid $1045 in out of pocket. Once we add this form, the tax owed goes up. Is this correct? Was I supposed to enter the out-of-pocket tuition somewhere else?

[NCperson]

can you explain more what you mean by 'out of pocket tuition'?  if that was paid to the school it should already be in Box 1. 

where did you enter the 'out of pocket' dollars (I wonder if was added to a scholarship line??????)

I assume you are filing joint? 

if there was no 1098T, what is the refund / tax owed at that point.  Once you enter the figures you noted, what is the refund / tax owed? 

[tomtom2345]

1. About out of pocket, $1045 is what she paid for the tuition and $75 is what the financial aid covered, totaling the $1120 in Box 1. 

2. I didn't enter it anywhere else, I was asking if that should've been entered somewhere. 

3. Yes. We are filing joint.

4. Before entering form:

Federal - $4579

State - $1084 owed

After entering form:

Federal - $4561

State - $1087 owed

I thought these scholarships/aid was not taxed? It seems like the financial aid was taxed at 24% on Federal and 4% on State. 

[NCperson · Accepted solution]

just so we are on the same page, you input the 1098T form EXACTLY as it is printed.  there is $1120 in Box 1 and $75 in Box 5. 

I think there must be a question that wasn't answered because it's seeing the $75 as income and not giving you the AOTC credit.  

If you are using desktop (I don't know how the online version works), go into Form view and look at the line where you spouse is info is listed and the indented line below that.  Review the answers to all the questions.  I think you will find an unanswered question somewhere. 

looks like there is a good chance your joint income is above $180,000.... if so,  I wouldn't even worry about entering the form; it gets you no value as you are not eligible for AOTC. 

let me know. 

[tomtom2345]

That is probably it. Last year I got some bonuses that pushed us above that limit. I will check the forms anyway.

Thanks!