Hi,
My daughter received several scholarships to attend her college, some of which covered her room and board. My understanding is that room and board scholarships are taxable. She received a 1098 T form with box 1 and 5 filled out. But it doesn't make any sense. The amount in box 5 is only about $1500 more than box 1. For the sake of argument say Box 1 is 42000 and Box 5 is $43500 . If I enter those 2 values into the appropriate slots in the Turbo tax software that means only $1500 is taxable. The problem is, that isn't right. I cannot figure out where the College got this 42000 figure. Tuition and other expenses would only be about 35000 at most? I don't know what they are including because the bills I have only list the broad categories.
At any rate I noticed if I put the amounts in those boxes in the software on her form and then on my taxes, I get nothing back. Not even the money I put in to pay tuition. But if I manually put in the Room and Board charges on her tax form as taxable then I get a big refund back.
So I'm wondering what is the right way to do this? Should I ask the school for an itemized listing of what they are deeming as qualified? Should I just use their numbers? Or should she actually report the room and board as taxable (about 9k) and will my large refund be legit if we do that?
Thank you! This stuff is so confusing!!!
April
