<p>I'm filing my 1040ez 2010 and FAFSA for next year right now and I'm in a bit of a dilemma.</p>
<p>My total school bill for 2010-2011 is about $10,000, with room/broad being $11,000. (total of $21,000)</p>
<p>Luckily I'm paying for it all via a mix of loans, and generous grants.</p>
<p>Grant wise I receive the:</p>
<p>Federal Pell Grant for $4,400
CT Aid Public Col Stdnt Grant for $3,000
Tuition Remission Grant UG I/S for $3,500</p>
<p>Global Citizen Award for $750 (scholarship)</p>
<p>I took out loans
Federal Direct Subsidized Ln 1 for $5,500
Federal Direct Unsubsidizd Ln1 for $2,000</p>
<p>So I have a total of $10,900 in grants, and $7,500 and as as a result I paid about $2500 out of pocket, split into $1250 every semester.</p>
<p>Recently my 1098t came in and box 5 (scholarships and grants) says $16550 and box 2 (amounts billed) says $9928.</p>
<p>I'm doing my FAFSA right now and my question is, do I have to enter the remainder of box 5- box 2 as taxable income? I'm very confused. I've only received one scholarship applicable for this spring semester for $750. And do I report this for my tax return?</p>
<p>Something does not add up. The grants and scholarships on the 1098 should be equal to the total grants and scholarships you received in the 2010 calendar year, not what you will be receiving for the school year. Are you a sophomore or beyond? What were your grants and scholarships for the whole 2010 year? Spring, Summer, and fall.</p>
<p>Grants and scholarships used to pay for unqualified expenses (anything other than tuition, fees and required books) are taxable income to you. You need to check the 1098 against your own records. remember some qualified expenses, such as required books, may not be included on the 1098.</p>
<p>Than you for the help! I’m a 6th semester junior right now, and apparently my school is adjusting the way tuition and fee charges are presented on the annual IRS Form 1098-T statement. “So Beginning tax year 2009 your total eligible charges (known as Qualified Tuition and Related Expenses) will be based on the billing date rather than the due date.”</p>
<p>"There will be two main effects resulting from this change:
The first effect is that your Spring 2010 charges will appear on your 2009 statement instead of your 2010 statement.
The second effect is a one-time situation where three semesters (Spring 2009, Fall 2009 and Spring 2010) are all reflected on your 2009 statement instead of the usual two. Subsequent to this, all statements (beginning in tax year 2010) will again reflect only two semesters."</p>
<p>Do you guys think there is some kind of error on the 1098-T form? Or am I looking at the numbers wrong? I keep very good records for every semester.</p>
<p>Correction room and board is about $6,000 for the whole year. I’m hoping that my loans are covering that aspect and the grants the qualified expenses?</p>
<p>Yes, it does mean that. It also means tuition and fees (box 2) and scholarships and grants (box 5) for any other semesters you attended at that school in, say, Spring and Summer 2010 are included on that 1098-T. So you have to subtract out the numbers that apply to Spring 2011, and only use the lower numbers to complete your 2010 taxes. You can probably find the Spring 2011 numbers in your account on your school’s website.</p>
<p>This may have happened this year because you registered for Spring classes earlier in the year than you did in other years (if registration time is based on the number of credits you have), and therefore were billed in an earlier billing cycle (one month earlier than the first two years you attended school). That is what happened to my son, who is also a junior. So box 7 was checked for him, too.</p>
<p>swimcatsmom – can you please further explain for me…</p>
<p>My son completed his first college semester and we just received the 1098T form (new to me). Based upon what you stated above about unqualified expenses being taxable, does this mean that if the total scholarships/grants for 2010 were used for tuition only, this is not taxable? Does my child need to file a tax return for this only (there is no other employment-related income) or is the indicated on my tax return? Thanks.</p>
<p>^^ That makes absolutely no sense. The 1098T is a tax form sent by the school to the student. It is filled out by the school before it is sent to the student. It is not filled out by the student. The student uses it for filing tax returns. Most colleges will not help you file your tax return. That is your responsibility.</p>
<p>I know I will NOT give tax advice to students. I will tell them if they have to file, but I won’t help them figure it out. I’m not a tax professional. You can use the internet to find free tax help in your area.</p>
<p>I too am surprised by the way the school reported on the 1098 - same as OP’s situation except that D is a freshman. I asked the tax preparer if she needed to file and we were told no, there is only $1000 difference between scholarship (approx. $9000) and qualified expenses billed (approx. $8000). Because the numbers were reported differently than what I expected I was baffled - but her books and other supplies were not included in qualified expenses so it all sort of made sense after I got over the shock.</p>
<p>Then filing FAFSA - the way the question regarding earned income was worded did not seem to include scholarship so we left it blank (because she didn’t work in 2010). But then when I entered the 9K in scholarship $ later on it gave me an error message. I called FAFSA for clarification and put the 9K figure in as earned income on the first question as they told me to do and all went well from there on.</p>
<p>I hope this gets easier! I think in the long run it will be easier to file with figures the way the school reported it - not so much math for people to make mistakes with, just fill in the blank with the appropriate # but I wish they had given more explanation.</p>
<p>The question about scholarships included in income is about taxable scholarships that were included in income or in the AGI if student filed a return. If you did not have any taxable scholarships (because they were all used for qualified expenses) then none should be included in income/AGI. So the answer to the question about how much scholarship money was included in income/AGI should have been 0. If you put an income amount that did not include the $9000 then later tried to say the income included $9000 you would get an error message if the income amount was less tha $9000. </p>
<p>For instance if the student’s income was $2000 and you then said that the $2000 includes taxable $9000 scholarship money it would throw out an error because there can not possibly be $9000 taxable scholarship money if the income is only $2000.</p>
<p>If none of the scholarship money was taxable you do not put it anywhere on FAFSA. They are only asking about taxable scholarships/grants.</p>
<p>This is why it was confusing - Box 5 of the 1098 had the 9K figure for scholarships/grants. Box 2 had the 8K figure for qualified expenses. So that makes it look like there was approximately 1K taxable unless you’re including books etc. added on.</p>
<p>However - the 8K figure is for the entire year’s tuition, not just the first semester - so box 7 is checked.</p>
<p>When I called FAFSA they had me list the scholarship amount twice - and from what I can tell that essentially reported it and then subtracted it out again. </p>
<p>So, if aid remains relatively the same, next year box 5 will be twice as much and box 2 will still only be 8K or so for next year’s tuition + fees.</p>
<p>It makes me wish I had taken an accounting class…</p>
<p>Sorry, but the people at the FAFSA help line are incorrect. What swimcatsmom says IS correct. The instructions for the question specify “reported on your tax return.” If there is no tax return, you don’t report any scholarship/grant amounts on the FAFSA.</p>
<p>Yes, it seems some of the 1098 forms being sent out by colleges do not correspond to a tax year. Part of the problem is that colleges bill in November 2011, but you may pay the bill in January 2012. Also, Financial aid may be credited in January of 2012, but you may pay the tuition in December 2011. As a result, the numbers don’t line up.</p>
<p>One person told me to make sure you print out your actual billing and payment records from the college on paper, and keep them in a safe place. If there are questions, that is what was matters - what you actually paid out after aid during a calendar year. (My son’s college clears all of the online billing statements after a year, so it is good to print it out).</p>
<p>It is easiest if you withdraw any 529 funds within the same calendar year as you pay that tuition bill.</p>
<p>It’s not easiest to withdraw 529 funds in the same tax year you pay the expenses, that’s what is required to avoid paying taxes on the earnings and the penalty. The 1098T may be fuzzy because of issues with payments/billing/credits across tax year, but there’s nothing fuzzy about the 1099Q you get following a 529 withdrawal.</p>