Tuition

[dd4vols]

had a 2023 1098-T with like $13,500 in box 1 and it had the boxes checked about including amounts for ...March 2024 checked. Scholarships were only $2,500, so no issues.

along comes the 2024 1098-T, and has -0- in box 1, and $1,250 in scholarships.

Student info page part IV properly lists the current (2024) year 1098-T from my 1098-T input page.  -0- in box 1 and $1,250 inbox 5.  So, do I manually input the college (same college) info on the next enterable line, and put the $6,750 that was paid in Dec 2023 but for March 2024 semester?

Thanks for any help or words of wisdom you might have.  Just trying to get the $1,250 to not show up as taxable

[Frustrated-in-IL]

• If I am understanding correctly, sounds like your client screwed up by paying the $6750 in December 2023 instead of January 2024.  Not only do you have a tax on the scholarship issue but there are no qualifying tuition expenses paid in 2024 for a tax credit.

[Terry53029]

Be sure to tell client not to pay tuition in advance, because he can only claim expenses paid in the current tax year. If the scholarship allows it you can use it for other school expenses such as room, and board while not used for credit it will not be taxable

[TaxGuyBill]

I'm just commenting to follow the post, and to say that I know that @rbynaker is really good with college stuff, so maybe he has some thoughts.

[rbynaker]

1098-T forms are notoriously unreliable.  Sure, they're probably fine if they say $40,000 Tuition paid and $5,000 of Scholarship (in which case the parents are probably over the AGI limit for credits anyway).  But for fringe cases like this I'd suggest you get the financial transcripts for both years (some call it a bursar's statement).

It's possible that there was a payment in 2024 that the college arbitrarily applied to room & board so it doesn't show up in the Tuition box.  The rules are very taxpayer friendly on this, you can allocate your payments in a way that gives you the best tax result, not necessarily just how the college computers want to apply them.  You just can't double-dip.

So if you can go back and allocate the 2023 payment to room & board first (instead of tuition), does that free up enough unpaid tuition to carryover to 2024 and absorb the scholarship?

And, I should have started with this, does it matter if the student has some more income or does it just get absorbed by the standard deduction anyway?

Rick