Thank you for responding. You bailed me out of a similar Education predicament last April. I hope you can steer me in the right direction again this year...
@AmyC wrote:
You don't mention education credits. If your income is too high for the education credit, you do not enter the 1098-T. In addition, if there is taxable scholarship income, it goes on the student's return.
1. I'm under the impression that for MFJ, the education credit phases out between $160-180K. We are under $160K.
2. There should be zero taxable scholarship income. The Box 5 scholarship amounts for 2023 are correct. It is100% Tuition-only, and the amounts shown in Box 5 for each student are the exact totals that were paid direcrly to the school for Spring and Fall 2023 tuitions on 1/23/23 and 8/25/23, covering no other fees or expenses.
The 1098-T is an informational form rather than a legal form. However, because of the way your numbers look, I wonder if the missing money is on last year's return. Tuition paid for the first 3 months of the next year are allowed on the 1098-T so perhaps winter 2023 was listed on the 2022 1098-T by the college.
You will need to check your records for actual 2023 expenses. Scholarships can also be wrongly credited but must be claimed when the 1098-T says.
3. We are billed for approximately $700 of Fees per student per semester. I paid those Spring 2023 fees for each student on 12/29/22 and claimed them on our 2022 return since it was their final AOTC semester. That's one reason the 2023 Box 1 number is lower, but it should still reflect the Spring and Fall tuition payments, plus our qualified fee payments for Fall 2023.
As I said earlier, 2023 Box 1 doesn't even reflect the Spring and Fall tuition payments that the school said they processed in 2023 (Box 5). In other words, the school received payment for the Spring and Fall scholarships for tuition in 2023 (Box 5). So why are those amounts not on 2023 Box 1 "Payments received for qualified tuition and related expenses"?
As you suggested, I checked the 2022 1098-Ts, and Box 5 for one student was $5,006, and the other was $5,562. Those were the exact amounts of each student's Spring and Fall 2022 tuition totals. There was no 2023 Spring tuition on the 2022 Box 5s. However, 2022 Box 1 amounts were only $1,312 and $2,261 more than the Box 5 tuition totals. Those in no way reflected the qualified fees and expenses we paid for each student for 2 Spring and a Fall semester. I didn't catch that last year. I trusted the numbers on the 1098-Ts, not understanding that it's an "informational form" filed with the IRS.
I'm an Engineer. Like Accountants, numbers need to make sense to me. So I'm still trying to figure out how we suffer a $3,053 reduction in Federal Refund when I actually ADD another $3,314 to Box 1 that accurately reflects 2023 Spring and Fall tuition payments (paid by Georgia) and Fall qualified Fees/Expenses (paid by us). I don't understand how paying MORE for school tuition/expenses results in a dramatic drop for our refund.
