Books and other similarly required supplies can offset the taxable scholarships.  Room and board can not.

For the $1000 non-taxable scholarship, have you confirmed that Box 5 includes that amount?  Those non-taxable scholarships are NOT required to be listed in Box 5, so you need to confirm if it is actually in Box 5 or not.

If that non-taxable scholarship is in Box 5, I would consider adding $1000 of extra 'books' to make effectively make it non-taxable.