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Your Form 1098-T, Tuition Statement, includes the payments your school received for qualified tuition and related expenses. Generally, scholarships and grants will be included in Box 5 of the form. However, if a scholarship is not included on the form, there is a place in TurboTax to include it. Your student loans are not included on Form 1098-T.
I know the Form 1098-T is not supposed to include student loan disbursements, but mine does. It seemed high, so I asked the college for a list of what made up the amount in box 5. They gave me a written printout that showed my few scholarships and the last disbursement of my student loan (which was $2,250). I questioned why that was included - as loans have to be paid back so would not be taxed - and they said I would have to make any adjustments on my tax return. My question is: How do I show an adjustment of 2,250 out of income since the Form 1098-T in incorrect?
When you enter the 1098-T in TurboTax just change box to what it should be. The 1098-T is only an informational document. The numbers on it are not required to be entered onto your tax return, at all, or exactly as printed on the form.
Unfortunately, this is a common error, with schools. Good catch!
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