topic question about 1098-T in Education

question about 1098-T

lyon811 — Sun, 31 Jan 2021 08:08:00 GMT

Hi, so I have a question about my 1098-T. I received about 10,000 or so financial aid from grants, scholarships etc... I was filling my 1098-T when I noticed how much taxes I may owe. In box 1 its only 1500 or so, but that only accounts for the first semester, as I paid the 2nd semester this year. Box 5 has 5500 or so in it.

Here is my question. Do I have to file my 1098-T, and include my refund got from financial aid, or can I not report it, and just say I will use it for future tuitions payments, (which I will). I've tried searching for an answer, and I can't find one. Any help would be great!

*Note I am claimed as a dependent from my parents*

Re: question about 1098-T

KathrynG3 — Sun, 31 Jan 2021 16:29:03 GMT

No. Since this is a loan, it is not reported. You will not report Form 1098-T, either. See below for a further explanation.

Your refund from financial aid is not really a refund. It is loaned money that is in excess of your tuition. Such funds are typically used for living expenses. But, keep in mind that you are paying interest on that money daily. So, it is a good idea to pay at least the interest every month if possible.

Keep in mind that dependents cannot claim the education credit, but they may be able to enter Form 1098-T on their return and receive an education credit. The American Opportunity Tax Credit is for the first four years of education following high school graduation.

See the articles below for more details:

Who is eligible to take the American Opportunity Tax Credit?

What education tax credits are available?

Re: question about 1098-T

Hal_Al — Sun, 31 Jan 2021 21:00:56 GMT

Q. Can I not report it, and just say I will use it for future tuitions payments?

A. Yes.

The 1098-T is only an informational document. The numbers on it are not required to be entered onto your tax return. However receipt of a 1098-T frequently means you are either eligible for a tuition credit or deduction or possibly your student has taxable scholarship income. You claim the tuition credit, or report scholarship income, based on your own financial records, not the 1098-T.

Furthermore, a student dependent can have up to $12,400 of scholarship and/or wage income before any of it becomes taxable.