Hi everyone! I'm trying to help my sister file her taxes through TurboTax and I'm a little stumped. Would you mind helping me?
My sister is a Ph.D student and therefore receives free tuition through her program. She got her 1098-T and on Box 1 it roughly says $20,000 and on Box 5 it roughly says $22,000. She says that the $2,000 difference is actually the same amount of money that her school-provided health insurance costs.
My question is: do we need to report this 1098-T on her tax return? She is NOT a dependent under my parent's tax filing. I'm just wondering if she needs to report this 1098-T since it's the school providing her tuition and therefore- would this money be considered "taxable"? I mean i'm thinking it could be both ways, because technically it is the school that "pays" her to attend the Ph.D program (therefore she doesn't need to pay). Yet, I'm thinking that it could be the other way around too...because if you think about it, my dad has been paying her tuition for her master's program several year's ago and always used her 1098-T to reduce his taxable income. So in this case, the 1098-T should only provide the possibility of reducing my sister's taxable income (just like my Dad's) and NOT adding to her taxable income, correct?
I'm just basically wondering if a) we need to report the 1098-T on her tax return: and b) is the amount really taxable? seems kind of unfair that we need to pay the taxes if it is in fact taxable. shouldn't the school be paying for the taxes instead then?
