Hello,
So on my 1098-T, it lists nothing on box one for the amount of tuition that I was charged, but they list the full amount that I received from my Pell Grant. So it's showing on my taxes that I just pocketed my entire grant and am now forced to pay taxes on it when I only received half my grant back and used a good portion of it for supplies. I am confused as to how they are allowed to do this, it doesn't show the whole story.
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Okay, since I couldn't get an answer that answered my question, I did some digging!
The IRS instructions for Box 1 says this "Enter the total amount of payments received for qualified
tuition and related expenses from all sources during the calendar year" Meaning that box 1 should not be empty!
You will have a chance to report all your expenses.
Go to the Education Section and start on Expenses and Scholarships (Form 1098-T). Go through the entire interview, and answer all of the questions carefully. Only when a scholarship exceeds expenses is it taxable.
The IRS provides a list of qualified education expenses in general. To summarize from IRS Publication 970, page 6:
Qualified education expenses. For purposes of tax-free scholarships and fellowship grants, these are expenses for:
• Tuition and fees required to enroll at or attend an eligible educational institution; and
• Course-related expenses, such as fees, books, supplies, and equipment that are required for the courses at the eligible educational institution.
These items must be required of all students in your course of instruction. Expenses that don't qualify. Qualified education expenses don't include the cost of:
• Room and board,
• Travel,
• Research,
• Clerical help, or
• Equipment and other expenses that aren't required for enrollment in or attendance at an eligible educational institution.
If you receive a scholarship, a fellowship grant, or other grant, all or part of the amounts you receive may be tax-free. Scholarships, fellowship grants, and other grants are tax-free if you meet the following conditions:
Because I entered my 1098-t, no where after entering it did it offer to let me put in how much tuition cost.
I went back to the area where I enter my 1098-t and input the amount that tuition cost after checking the "This is not what was paid to the school."
By doing this, am I okay? or is it wrong to enter tuition cost there?
Okay, since I couldn't get an answer that answered my question, I did some digging!
The IRS instructions for Box 1 says this "Enter the total amount of payments received for qualified
tuition and related expenses from all sources during the calendar year" Meaning that box 1 should not be empty!
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