My 1098-T has been roughly the same for the past few years. My box 5 has exceeded by box 1 by about ~$5500 each year. When my wife and I filed in 2021, our tax professional did not include it in our return. She explained that because my box 5 was larger than my box 1, I wasn't eligible for any education tax credits, so the 1098-T didn't need to be included in the return. Following this advice when we filed earlier this year, we didn't include my 1098-T.
I've done some reading and I'm getting conflicting answers. Some people say you don't have to include that money as income at all, others say it's required, others say it depends how much you spent on books/equipment, others say it depends on your standard deduction, etc.
We're independent and file married-jointly.
In 2020, when exempting $10,200 each for pandemic unemployment, our gross income is about $11,100. For my 1098-T, my box 5 exceeded box 1 by $5,900. I spent about $1,500 on supplies that year.
In 2021, our gross income was about $21,100. For my 1098-T, my box 5 exceeded box 1 by $5,400. I spent about $1,900 on supplies that year.
For 2022, our projected gross income is about $20,400. I'm expecting my box 5 to exceed box 1 by about $6,500. I spent about $3,500 on supplies this year.
I guess my big questions are:
Did our tax professional give us bad advice, and if so, how do we fix it?
How does our standard deduction play in? For example, for our 2021 taxes, our standard deduction was $25,100. When you add our gross income to the $5,400 from my 1098-T, our new gross income is $26,500. When you take off the $1,900 I spent on supplies, we have a gross income of $24,600, below our standard deduction. Do I need to amend our return, even though our gross income is still below our standard deduction?
Given our information, should we have included my 1098-T for the 2020 and 2021 returns? Should I file amended returns? Should I include my 1098-T on next year's return?
