Grad Student stipend

[Amy111]

I'm a CPA (corp accountant not tax) and I'm trying to help my grad student daughter with her taxes.  She gets a stipend and I understand that is taxable.  The numbers reported on the 1098-T in box 5 include tuition and actual cash she received.  The amounts in box 1 I would think would = the non-cash amounts in box 5 thus cancelling out the non-cash amounts as QED.  They don't.  Inputting the amounts lead her will $10K more in taxable income than she received in cash and this makes no sense to me.  She does not have other out of pocket QEDs.  I'm tempted to override the 1098 T to get the answer I think it should be.  Any suggestions?   

[LeonardS]

If the income your daughter received was a  Stipend she will enter it in TurboTax as income not subject to self-employment tax.

To report a Stipend in TurboTax follow these steps:

1. Log in to your TurboTax account if it is not open.
2. Select the Wages & Income tab.
3. Scroll down to Less common income click Show more.
4. On the page Let's Work on Any Miscellaneous Income click on Other reportable income.
5. On the page Any Other Taxable Income?  select yes.
6. On the page, Other Taxable Income enter Stipend for the description and the amount.
7. Select continue and answer No on the next page.

[Hal_Al]

Scholarships and Stipends used for QEE (qualified educational expenses) is tax free.  Stipends that pay for room and board and other livings expenses is taxable.

Overriding  the 1098 T to get the answer you think it should be is the quick solution. particularly if box 1 is not correct. 

Letting TT do it's job, can be done in two ways: 1. Enter her books and other qualified expenses. Box 5 minus QEE = taxable amount.  2. When asked how much of the scholarship/stipend was used for room and board, enter the taxable amount. Note the wording at that screen “or other expenses”. You didn’t have to literally use the scholarship for R&B. 

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 2021 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.

[Amy111]

super helpful.  Thank you!