1098-T form?

Question

I received my 1098-T form for last year. Box 2 has $17,010 and box 5 has $18,228. I was told that I have to report these amounts on my tax return and pay taxes on the $1,218, even though I used this money to pay for room and board. Last year, I was told by the person who was filling out my taxes that because the amount in box 2 (last year it was $8,335), was less than the amount in box 5 ($10,823), I did not qualify for the Hope credit or any other credit, and that I did not need to do anything with the form. Can someone please explain this to me?

Anonymous · Accepted Answer

Room and board is not tuition.  Only tuition is tax-free.

The person who did your 2014 taxes was correct that if your tuition is covered by scholarships, you can't get a credit.  They failed, apparently, to include the difference of $2488 as income.

You should verify your 2014 return and amend if appropriate.  Look at the return, line 7.  Is there a code SCH listed on it?

CarVolunteer · Answer

Education expenses (tuition and sometimes books) are eligible for credit/deduction if you pay them.  If grant/scholarship money pays them, they are not eligible for credit/deduction (you didn't pay them) but the grant money isn't taxable (it went for education expenses).

General living expenses are not deductible for anyone.  Room and board are living expenses.  You needed a place to sleep and food to eat even if you didn't go to school.  Fellowship or grant money used for that is therefore taxable, just as if you had worked for it.

Judy · Answer

Your tax person last year messed up.  And room and board are not eligible education expenses, so spending the excess on that doesn't help you.

Slickterp · Answer

Scholarships, etc above qualified expenses are income to you. Simple.  Room and board doesn't count because you have to live somewhere anyway...

tro · Answer

even tho!!!!!!! if you used this amount of money for room and board of course it is taxable! it is not a cost of your education, it is a personal thing, you would be eating at home and that would not be deductible either

1098-T form?

5 Answers