Does box 1 on 1098 T include what was paid through scholarship?

[jfmaniac]

My daughter got her 1098 T and box 1 said 3740 and box 5 has 3250... when they get added into tax form the difference is 598 or what not including books. But she paid 3740 out of pocket and scholarship gets deposited directly to the school. Wouldn't the box one the total of 3250 and 3740?

[DanielV01 · Accepted solution]

It depends.  The amount in Box 1 is supposed to represent all payments received throughout the year, both scholarship and out-of-pocket.  However, institutions can report things incorrectly.  The way to know for sure is to get a transcript of her expenses and payments for the year.  If it turns out that the Box 1 figure was reported on only her out-of-pocket payments, use the transcript to figure out how much the expenses paid really were (including those covered with scholarship).  

If the box 1 figure is wrong, it would be best to have the school re-issue a corrected 1098-T.  However, even if they do not, you can file the expenses accurately per the transcript, and keep the transcript available if the IRS asks for proof on the amount of paid expenses you are claiming for educational credits.

[jfmaniac]

That is what we were thinking as well. Just wanted a professional answer we will go talk to the school