1098T- Box 5 exceeds box 1

Forum|Forum|1 year ago
January 30, 2025
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Hi! I cannot figure out what to do. I am a full-time college student and I received my 1098T form from my university yesterday. In Box 5 (My total number of scholarships received), the number is around $24,000. In box 1 (Qualified tuition and expenses), the total number is around $10,000. When I input this information when doing my taxes, it considers that $14,000 difference as income. Taxable income. The problem is I did not receive any of that $14,000 as income. In fact, the full $24,000 was applied to my account and it still didn't cover all of my charges(This includes meal plan and room and board). After the full $24,000 was applied to my account, I paid the remaining balance out of pocket. Turbo tax gives me the option to change box 1, and I thought I was supposed to do that. But I am also seeing that I am not supposed to(according to other threads on here). This is confusing to me as they would change my income for the year from $11,000(How much I made from working and is recorded on my W2's) to $25,000 due to the $14,000 difference from my 1098 T. But like I said above I did not receive this money. I did not get any type of refund and had to pay the remaining balance myself. Does anyone know what to do here?

KrisD15

Level 15

If I understand correctly, only 10,000 went to the school and the remaining 14,000 went to other things, like Room and Board.

Funds used to pay for Tuition, Fees, Books and Supplies is tax-free.

Funds used to pay Room and Board are taxable to you.

It is like the 10,000 of the scholarship went to the school to pay tuition.

Then 14,000 WOULD HAVE GONE TO YOU, thus taxable, but rather than go through your hands and back to Campus, the school paid for your room directly.

IRS Pub 970

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Megumi47Author

Level 2

Thanks for responding!

Quick follow up. So the fact I did not receive a refund doesn't matter? With this "Added income" I will now owe money since $14,000 is a lot( And I also worked to pay the rest of my tuition) so I wanted to be sure.

Second follow up so I can understand: I am essentially paying taxes on the scholarships given by my university for room, meal, and other non-qualified expenses even though I am not receiving any of this money personally and it doesn't cover everything.

Hal_Al

Level 15

@Hal_Al

Box 1: $11, 116.44

Box 5: $20,804.00

Total Wages: $19, 249.26

Books: $409.45

Thank you!

If not being claimed as a dependent, enter the 1098-T, exactly as received, on the student's return. Enter book expenses separately. When asked if any of the scholarship was used for room and board, answer yes. Then enter $13,279* in the pop up box. R&B are not "qualified educational expenses". So, this is how you tell TT that it is taxable. Note the wording at that screen “or other expenses”. You didn’t have to literally use the scholarship for R&B. This will put the taxable scholarship on line 8r of Schedule 1.

*20804 -11116-409 =9279 of the scholarship is already taxable. By making $4000 more taxable (9279 + 4000 = 13279), we free up $4000 of expenses for the tuition credit. TurboTax will automatically give him the credit.

Note: if you decide that he cannot be your dependent, there is an important question in his personal info section that must be answered correctly to get him the full $2500 AOTC: more than half his support comes from his earned income.

If you encounter a screen called "Amount used to calculate education credit" (or similar wording). Be sure the amount in that box is $4000. That screen doesn't always come up.