Tax Year Prior to 2020: Are you required to file your 1098-T form?

[Taynb]

If I only have info in box # 1, am I going to get less in my tax return?  Or is that only if I have info in for or 5?

[LinaJ2020]

It really depends.  You receive a Form 1098-T when you paid tuition amount to your school.  On the form, Box 1 is how much tuition you have paid.  Box 5 is your scholarship amount received. If you only have an amount in box 1, you should qualify for an education tax break.  If you have an amount in box 5, it depends.  Please continue to read: 

When you also received a scholarship that fully covers your qualified education expenses, it is like a wash.  You do not get any tax break.  If your scholarship does not cover all of your education expenses, you may still claim either a credit or deduction on your tax return.  However, if your scholarship exceeds your education expenses, the difference will be treated as wages added on line 1 of your Form 1040.  If you meet certain requirements, you may qualify for an education tax break including the American Opportunity Tax Credit AOTC, Lifetime Learning Credit or Tuition & Fees deduction. To see if you qualify, here are the links: 

Qualified expenses

Deductions

Credits

I will recommend you to continue to enter your Form 1098-T in the program and let the program calculate and verify if you qualify for any education tax breaks.  Here are the steps:

In TurboTax online,

• Sign in to your account, select Pick up where you left off
• At the right upper corner, in the search box, type in "1098t" and Enter
• Select Jump to 1098t
• Follow prompts

@Taynb

[Dd203]

You need to report it bc your scholarships are considered taxable income and the IRS already has a copy of your 1098 to compare to what you file. So if you omit it to evade paying taxes on the scholarship amount the IRS will already know and when you get audited you'll be liable for penalties and late fees on the unpaid taxes.

[OCC16]

Hello, if my tuition was higher than the scholarship amount, should I file my 1089-T form? Am I eligible for a credit? I have paid for tuition using my student loans so far as I am still a grad student. I don't want to pay for the deluxe TurboTax plan to file this form if I won't even benefit from filing it. I'd appreciate any responses. Thanks.

[JotikaT2]

It depends.

While you are not eligible for the American Opportunity Credit, you may be eligible for the Lifetime Learning Credit or an adjustment to your income with the Tuition & Fees Deduction.

I have included more information on each of these options.

Lifetime Learning Credit

Tuition & Fees deduction

If anything, you may be able to reduce your taxes.

If you determine you may benefit from either of the options above, please see the link below for guidance to enter the amounts into TurboTax.

Entering Form 1098-T

[OCC16]

Thank you for the quick reply. My income this year is under $6,000 and I'm already going to be receiving a tax refund. My tuition amount was around $18,000 and the scholarship amount was around $25. If I were to get the Lifelong Learning credit or the tuition and fees deduction, would it amount to more than $40, the cost of the TurboTax plan I'd need to file the 1089-T? I'm not going to be itemizing things like books, etc. because I did not spend much on them nor do I have all the receipts.

[JotikaT2]

The Lifetime Learning credit is nonrefundable but the credit can reach up to $2,000.

The Tuition and Fees deduction actually reduces your adjusted gross income and could lower your taxable income.

Assuming your scholarship is just the $25, then you may not even had a filing requirement.  If it is $25,000, then any excess of scholarship income over tuition would need to be reported as income.

Please see the link below to determine if you have to file an income tax return based upon your income amount.  If you do not have to file, then it would not benefit you to claim the credits.

Do I need to file a return

[OCC16]

Hi, my scholarship is only $25. I am aware that I do not have to file since it is less than my tuition, but I want to know if I can receive a tax credit that will provide me with more money (over $40). I do have to file my taxes in general since my taxes have been withheld from my paychecks. I want to know about the 1089-T form. What is a nonrefundable credit? I am upset that TurboTax has advertised that I pay for their deluxe plan to file this form when I do not even know if it will benefit me.

Thank you again for your continued help. It is much appreciated for this confusing situation.

[DianeW777]

No, you don't have to report your 1098-T, unless you want to claim an education credit and because your scholarship income is not a factor based on your comments. 

A nonrefundable credit is one that allows you to reduce your tax to zero, but will not allow any excess to be refunded to you.  Essentially if you tax is less than the full credit, you credit will be up to the amount of your tax and the rest is lost.

Only the person who claims the dependent that goes to college can take the credit.  If you are single and no one claims you as a dependent, then only you can take the credit.

• Where do I enter Form 1098-T?

If the credit is of no benefit to you, and you have not registered or paid for your TurboTax product, you can choose to clear you return and start over to drop back to the other version. You will have to start the return over.

• How do I clear and start over in TurboTax Online? 

[OCC16]

Hello,

Based on the information I have provided in the above comments, do you think I would be able to receive an education credit/Lifelong Learning Credit equal to over $40? Based on the various replies I received, I still am not sure and therefore still don't know if I should spent the money to file my 1089-T.

[KrisD15]

Non-refundable credit means the credit can lower your tax liability possibly to zero, but at that point it stops. This means AT THE MOST it might zero out your tax, however it might not get your tax down that low, it depends. BUT if it does get your tax to zero, the remainder of the credit is lost. 

Refundable credits can take your tax liability down, but if the tax goes down to zero, the rest of the credit will be "refunded" to you as a tax refund. 

Without knowing your tax liability, and not knowing the amount of the credit (it depends on several factors, such as how much you paid in tuition and fees and how much you earned in wages)  it is impossible to answer if the credit will be worth more than the upgrade charge. 

You can use the link below to get to the IRS FreeFile, it might help you file the 1098-T for free. 

There is a disadvantage of using the IRS FreeFile, if you are a repeat user of TurboTax. Your information won't be forwarded year after year, and your availability to retrieve your prior year documents from your TurboTax account will be sacrificed. 

You could try the IRS FreeFile to see the affect the credit can make, then decide to file through the IRS FreeFile, or upgrade in TurboTax. 

IRS FreeFile

[OCC16]

Thank you! I will check it out. In terms of not being able to retrieve prior year documents from TurboTax if I file through IRS FreeFile, do you mean just this 1089-T or all my past documents are erased for the coming years?

[AmyC]

Tax Return Access: Included with all TurboTax Deluxe, Premier, Self-Employed, TurboTax Live, TurboTax Live Full Service, or prior year PLUS benefits customers and access to up to the prior seven years of tax returns we have on file for you is available through 12/31/2022. Terms and conditions may vary and are subject to change without notice.

@OCC16 You always want to print out a copy of your return. If you need a prior year and did not print a copy, you can get a transcript from the IRS or pay them for an entire copy. See Get Transcript FAQs

[kevinchan0310]

After I enter my 1098-T form on TurboTax, I had to pay $2400 tax!

But if I use FreeTaxUSA or B&R block to file, I only have to pay $800.

This doesn't make any sense

[mbuendia1]

Hello,

I never received my 1098-T from my school and after some research found that I will not receive a 1098-T if "The amount paid for qualified tuition and related expenses in the calendar year is less than or equal to the total scholarships disbursed that year" which is exactly my situation. I'm aware that the amount over my tuition I received is taxable income so I should report it, however, if I do not have the form, is it ok if I just use the numbers from my financial aid profile from my school?