I have 2 1098-t's. One lists scholarships in the amount of $1,049.50 and $0 billed for expenses. The other 1098-t from a different college lists $4,444 in expenses and $250 for scholarships. Do I subtract the amount from the first 1098 off the expeneses on the 2nd form?
-
-
No. Also never rely on those forms. Often colleges bill in the prior year for spring semester, then credit the scholarship in the following year. Make your client get a transcript of charges and payments from the school. You cannot do the education expense credits/deductions without it. You need to know when the payments were made and in what amounts as well. -
enter each separately using your program's formBelieve nothing you have not personally researched and verified.Comment
-
What I would do
You have to determine if the first scholarship is taxable. If it is, you enter it as scholarship income on Form 1040 line 7. Then you deal with item two as you would any other situation.Comment
-
Data entry
If you blindly enter the information from any Form 1098-T, your software should give you a "correct" answer but one that is totally limited by the GIGO concept.
There have been many, repeat MANY, TTB posts on this topic. A search should provide access to those prior discussions.
BTW: For tax purposes, "billed" is essentially a meaningless concept in the first place.
Bottom line: The Form 1098-T can, at best, only offer "guidance." As stated by Burke, you must show some effort to obtain the pertinent (payment) information so that you can prepare an accurate return. Merely relying on a Form 1098-T and then simple data entry/tax software to rescue you can quickly lead to immense problems. . .
FEComment
Comment