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New Member
posted Feb 16, 2022 7:40:12 PM

What do I enter for the tuition expenses.

i am confused, it says "do not include tuition paod with tax free scholarships, grants, or wisconsin state sponsored education savings account. I didn't have to pay for my college tuition because of financial aid, so....do I enter the amount I was given for "said" year?

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2 Replies
Expert Alumni
Feb 16, 2022 8:04:48 PM

If you paid your tuition with personal funds or from the proceeds of a student loan, enter the amount of that tuition.  If you received a scholarship, grant, or withdrew funds from an education savings account such as a 529 plan or a Coverdell Education Savings Plan to pay tuition, do not enter the amount of tuition paid from those sources.

Level 15
Feb 17, 2022 4:42:15 AM

"Financial aid" can mean many things.  If it was loans, you treat the payments for tuition as being made by you (it's your  money, you have to pay it back someday).  You cannot, usually, claim tuition paid by scholarships*.

 

Generally, the TurboTax (TT) interview can handle all that. You enter the 1098-T then answer the follow up questions.  TT sorts it all out. But it can get  complicated.

 

For more specific advice, provide more detail on your situation.  

 

*

There is a tax “loop hole” available. The student reports all his scholarship, up to the amount needed to claim the American Opportunity Credit (AOC), 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.

Books and computers are also qualifying expenses for the AOC. So, extending the example, the student had another $1000 in expenses for those course materials, paid out of pocket, she would only need to report $5000 of taxable scholarship income, instead of $6000.