You should not choose the election of not reporting the Form1098-T on your return. A copy has been transmitted to the IRS and they will eventually determine that is was not reported. You will then receive a letter asking for the taxes on the amount of scholarships and grants that exceed your tuition and fees.
You need to do the following steps:
- What you need to do is first is to request a copy of the documentation from the school showing were they returned the amount to your employer.
- You should change the amount on your return in Box 5 to the amount the school actually received toward your expenses.
- You then need to write a statement, to be sent in with your return, explaining why you changed the amount in Box 5 of Form 1098-T. You should also include a copy of the document from the school to support your statement.
You will be required to mail in the return with your statement attached. Currently there is not a way to attach a statement with an e-filed tax return.
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