I'm an undergraduate student, age 21, living with parents. My question is about the 1098-T. I get a lot of financial aid, which covers all my tuition and then I get paid what's left. The way it works is, the money goes straight to pay the tuition and then I get the rest directly in my bank account. For 2019, my grant was $5969. The money paid the tuition and fees directly and then I got a refund of $2021.
I'm confused because it seems like my 1098-T has different numbers. Box 1 (payments received for qualified tuition and related expenses) says $3693, while Box 5 (scholarships or grants) says $5969. For one thing, I don't know where it's getting the Box 1 number, because I didn't directly pay for the tuition, it came out of my financial aid.
Then, when I enter the $5969 on Turbo Tax, it takes out a good chunk of my refund. My question is, since much of the grant went straight to tuition payments, shouldn't that not count as taxable income? Should I report $2021 for scholarships and grants?
I would appreciate any input. Don't want to get a smaller refund but also don't want to get in trouble with IRS 🙂
