1098-T Form

Forum|Forum|5 years ago
February 13, 2021
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Hi!

I recently graduated and my school didn’t send me my 1098-T form. I retrieved it from my records. Box 5 if greater than Box 1. Does this mean I will “owe” money to the IRS? Will I still receive any deductions or credits as I was in school in 2020? How will this effect any refund I receive?

Thank you

TurboTax Free Edition Online

Hal_Al

Employee

Q. Box 5 if greater than Box 1. Does this mean I will “owe” money to the IRS?

A. Yes, unless you own records show you have some offsetting expenses or part of the scholarship was applied to expenses charged in 2019.

Q. Will I still receive any deductions or credits as I was in school in 2020?

A. No. You don't get deductions or credits for "being in school". You get deductions and credit for paying qualified expenses out of pocket. Furthermore, graduation year is usually the 5th calendar year of college and there is a four time limit for claiming the most generous tuition credit, the American Opportunity Credit.

Q. How will this effect any refund I receive?

A. If you have additional taxable income, your refund will, most likely, be reduced.

The 1098-T is only an informational document. The numbers on it are not required to be entered onto your tax return. However receipt of a 1098-T frequently means you are either eligible for a tuition credit or deduction or possibly your student has taxable scholarship income.

If you claim the tuition credit, you do need to report that you got one or that you qualify for an exception (the TurboTax interview will handle this)

You claim the tuition credit, or report scholarship income, based on your own financial records, not the 1098-T. In the 1098-T screen, click on the link "What if this is not what I paid the school" underneath box 1. You will then be able to enter the actual amounts paid. You will also reach a screen that allows you to adjust the scholarship amount for "amounts not awarded for 2020 expenses".

atorres28

Okay thank you.

I was only in school for two and a half years. That still qualifies me for the credit, yes?

Hal_Al

Employee

Q. I was only in school for two and a half years. That still qualifies me for the credit, yes?

A. It certainly means that you are not disqualified based on the "maximum 4 times" rule.

You still haven't addressed the box 5 > box 1 issue. But, the fact that you might be eligible, introduces a new factor.

There's a loop hole available to claim the credit, even if you are on scholarship.

.For details, see: https://ttlc.intuit.com/community/college-education/discussion/yes-that-is-a-tax-loophole-available-but-you-can-not/01/715052#M19895

atorres28

I apologize. Box 1 is less because I was charged less than my scholarships, grants, and loans. The remainder was refunded to me and used for expenses such as school supplies, transportation, and other personal expenses. The difference was ≈ $1500. I don’t have any receipts for that.

That said, this would be the third time I claim the credit. What would I need to do to reduce my tax burden?