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January 22, 2020
Question

Form 1098-T

  • January 22, 2020
  • 1 reply
  • 0 views

I accidentally have not filed my for 1098-T ever. My first semester of school was summer 2015, and since then, the amount of financial aid awarded has exceeded the amount of tuition. What should I do? I probably will have to pay back taxes? Also, the time has come up to file my taxes again. Should I include my 1098-T this time? The award exceeds the tuition amount. Will that raise a red flag?

    1 reply

    KrisD15
    January 22, 2020

    Sounds like you want to do the right thing. Good. 

     

    Yes, the 1098-T should be included on your 2019 tax year return. Will this cause an audit? No one knows whom the IRS will investigate, but that is no reason to not report income. 

     

    REMEMBER- Tuition, which is reported on your 1098-T can be applied to the scholarship to make the scholarship tax-free, but other expenses not listed on the 1098-T might also count, such as books and supplies. Be sure to include these expenses. 

     

    Now that you know you were not reporting the 1098-T on past returns when you should have been, you should amend those returns and pay any additional tax that you owe, so in your case back through 2015. There is a limit on amending a return for a refund, but not for paying additional tax. 

     

    Also in your case, since it was an honest mistake, I advise you work through an IRS Taxpayer Advocate. You may be liable for penalties and/or interest on the past tax. Since you are stepping up and correcting the situation, working with a Taxpayer Advocate might allow you to work out a compromise with the IRS. 

     

    You don't want to ignore the issue, the sooner you clear everything up, the better. 

     

    PLEASE CLICK HERE to find help through an IRS Taxpayer Advocate

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