1098T Zero entered in Box 1

Forum|Forum|2 years ago
January 29, 2024
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Hello,

My son graduated school in may of 2023. Any payment and charges were payable in December 2022 for the the final Spring 2023 semester.

I received our 2023 1098-t with a zero balance in box 1 because any activity that was placed in the account was in December 2022 and then in box 5 there was the grant figure (pretty large). It makes it seem as though he was given cash and he needs to pay taxes on all of box 5.

I understand that financial aid which exceeds education expenses (Tuition, Books & Supplies) is taxable income.

That number should be approximately $5K. I want to add that to my son's taxes since he has been working since July and will be filing a tax return.

What form do I use in turbo tax to include that in his taxes.

If I'm forced to use the 1098t form in turbo tax what do I do?

Thanks, btw your responses from last year helped alot

AmyC

Employee

If you did not claim the tuition paid in December on last year's return, then you can use it now. Tuition paid for the first 3 months of the next year also qualify, See page 12, What Expenses Qualify at IRS Publication 970, Tax Benefits for Education..

The income can be reduced by books and other expenses in 2023 as well.

The 1098-T will go on your son's return along with the expenses allowed to create his taxable income. The 1098-T will not go on your return.

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dansole26Author

Thank you.

Would I be able to just add the $5k to schedule 1 additional Income under "Scholarship and fellowship grants not included on form w2" ?

Hal_Al

Employee

Q. Would I be able to just add the $5k to schedule 1 additional Income under "Scholarship and fellowship grants not included on form w2" ?

A. The proper way to enter it, in TT, to get it to line 8r of Schedule 1, is to enter the 1098-T. Instead of 0 in box 1, you enter the amount that was applied to the account in December 2023. So now, the difference between box 5 and box 1 should be about that $5000. Or, you can just adjust the box 5 amount to the net taxable amount.

: 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 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 2023 expenses".

Or if you find it easier, just change the numbers in boxes 1& 5 to what your records show. The 1098-T that you enter in TT is not sent to the IRS.