I almost did this, but I am not convinced it is the best way to do it. IRS publications like Pub 525 pretty clearly say to put taxable scholarships on line 7 of the 1040, labeling with SCH next to the taxable scholarship income. Answering the TurboTax questions about educational expenses and scholarships automatically did put our excess scholarship income as taxable income on line 7, as the IRS instructions say to do, even without a 1098-T. However, if I follow the above directions this SCH income ends up on line 21, and it feels like some kind of workaround from how TurboTax is set up to work. I'm not sure it would be "wrong" (legally/ethically) to put it on line 21 and not line 7, but why not put it on line 7 like the IRS says and like TurboTax is set up to do? I also felt like it worked out better for us tax-wise to put it on line 7, though perhaps I'm confused and there wasn't a difference.
