Best advice fugetaboutit. You won't get audited. Box 5 of the 1098-T is not on the IRS's radar.
The $29 is usually taxable income, but would be wiped out if you had some book expenses, in addition to the tuition.
As Opus 17 indicated there is a loop hole available. You are allowed (in most cases) to claim the $877 as income, allowing you to use the $848 to claim a tuition credit (the tuition has no longer been paid by TAX FREE grants). Half time (or more) students are allowed to claim the AOTC. So, it could be worth as much as $848 to you or your parents, if you are their dependent. The Lifetime Learning Credit (LLC) would be worth $848 x 20 % = $170
But taxes aren't simple. The AOTC is worth as much as $2500, but is limited to being claimed 4 times, so you may want to save it for a year when you pay more (only undergrads are eligible).
