If after entering your 1098T your tax due goes up; this is usually due to taxable scholarships or getting more in Box 5 than the number in Box 1 tuition paid. Treating it as taxable, as well as room and board paid from scholarships or grants. Make sure you stuck with your expenses that are qualified for federal/state purposes.
Q5. What are qualified tuition and related expenses for the education tax credits per IRS?
A5. In general, qualified tuition and related expenses for the education tax credits include tuition and required fees for the enrollment or attendance at eligible post-secondary educational institutions (including colleges, universities and trade schools). The expenses paid during the tax year must be for an academic period that begins in the same tax year or an academic period that begins in the first three months of the following tax year.
The following expenses do not qualify for the AOTC or the LLC:
- Room and board
- Transportation
- Insurance
- Medical expenses
- Student fees, unless required as a condition of enrollment or attendance
- Same expenses paid with tax-free educational assistance
- Same expenses used for any other tax deduction, credit or educational benefit
Depending on the state you live in, they could treat scholarship funds (Box 5 of 1098T) received in excess of your qualified educational expenses (Box 1 plus required materials) may be taxable and might need to be reported in your taxable income. Here is a wonderful article by TurboTax regarding scholarship money and taxability.
@auri870529
**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
