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Confused about 1099-Q and refund check from college
I'll try to keep this as simple as possible.
I enrolled at Full Sail University in summer 2017. For tuition costs, I intended to use a Florida Prepaid College Plan that my parents had set up for me, as well as my mom's Post 9/11 GI Bill benefits.
So, flash forward to when I drop out. Full Sail informed me that I would have to pay $5,625 for the first semester's tuition since I dropped out past a certain date. I don't know exactly HOW they did this, or exactly WHAT Florida Prepaid and the VA sent them, but semester one's tuition was paid for.
So then, I started getting checks in the mail. One check was from Full Sail themselves. It was a check for $8,693.81. Then, I started to receive other checks from the United States Treasury office. There were three checks for $75, and one check for $507.47 -- so $732.47 total. I deposited all of the checks into my savings account.
Sometime after the checks, I received a letter from the VA stating I owed them $150 for a refund on "supplies and books fees". So, I paid them $150 over the phone and never heard from them again.
So now, I've received in the mail two forms that are confusing the absolute $#!% out of me! They are the 1098-T (from Full Sail) and 1099-Q (from Florida Prepaid) forms.
So on the 1098-T, the only boxes that are checked out are 2 (tuition costs -- $5,625), 5 (scholarships/grants -- $3,375), and 8 is checked saying I'm at least a half-time student.
On the 1099-Q, 1 (gross distribution -- $10,903.81), 2 (earnings -- $4,064.33), and 3 (basis -- $6,839.48) are filled out, and "State" is marked in box 5.
So I fill out all of the questionnaire for the forms in TurboTax (which I have to use TurboTax Deluxe apparently for the 1099-Q form), and I end up seeing a federal refund of $829... I'm sorry, what?
I totally feel like I should be owing the government money since I technically received $8,694 of extra income on top of the $6,998 I made from working my part-time job.
While filling out the questions for the 1099-Q, TurboTax asked me if "recieved a refund for qualified higher education expenses, such as tuition reimbursement for a dropped class", and I clicked "yes" because... did I not recieve a refund from Full Sail for the money they took from Florida Prepaid? I mean, the 1099-Q indicates that I had $10,903.81 total. I received $8,693.81 back from Full Sail. So Full Sail used $2,210 to pay for the $5,625 of tuition costs, which leaves $3,415 up in the air. So, why am I not being taxed for the money that I got back from Full Sail???
Perhaps what confuses me the most is that my 1098-T form indicates I received $3,375 for scholarships. I was NEVER informed by Full Sail that I had received a scholarship, although I applied for two: one that was $1,000, and one that was up to $4,000...
I am beyond confused and I don't know what to do. Should I just skip TurboTax and seek out a real life tax advisor?