<p>I have a question about taxes and not sure I am posting in the right place. But, here's the situation. My daughter goes to a private college with tuition of $31,000 a year (not including room and board). She has scholarships from the school for $21,000. So, I am thinking that we should qualify for a tax deduction of qualified education expenses of $10,000. (We fall under the income limit). But, her school sent us a 1098 that listed qualified expenses paid Box 1) as $16580 and scholarship as $21,000. According to the IRS, in calculating what we can deduct, we are supposed to list the $16,580 as qualified expenses paid, then deduct the scholarship amount from that. When we do that, it shows that the scholarship exceeded the amount of qualified expenses and then tells us my daughter has to pay tax on the scholarship amount above the qualified expenses. Does this make sense? Is it correct?</p>
<p>Is this her first year? It sounds like the college applied all of her scholarship to the first term (Fall '12) but only counted the Fall '12 expenses on the 1098. For my D, her Barnard grant was split in half as were her expenses. </p>
<p>I would call the school and inquire about it.</p>
<p>CollegeMom63 -</p>
<p>There are a several threads on the whole scholarship and tax thing in the Financial Aid Forum. Chances are that you can find useful ideas there.</p>
<p>Set aside that 1098t for the time being. Print out the statements from the college that indicate what was paid and when, and dig out your own records. It is a rare event when the information on a 1098t turns out to be precisely what is needed for the tax return. For starters, the 1098t generally includes items billed in 2012 for terms beginning in the first three months of 2013 whether or not those items were actually paid for (or a scholarship actually applied toward) in 2012. Chances are that the bursar’s statement will show the second semester scholarship applied to the student bill as of the first day of class second semester.</p>
<p>The above poster is correct. You need to calculate your total fees paid and tuition paid and any above the amount on the 1098t you include in the tuition and fees section for the student. It includes all amounts paid in 2012 even if for 2013. You also need to calculate cost of books, supplies, and computer/printer purchased in 2012 and include this on the student’s form.</p>