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Scholarships, 1098-t, and a mistake with last year's tax return

muselymusely Posts: 20Registered User New Member
So I'm definitely feeling really confused right now. Last year, I had about $13,500 in scholarships and $2275 in qualified educational expenses (tuition + books). My school didn't issue me a 1098-T but I went ahead and claimed everything on my 2007 tax return because I was scared the IRS might come after me if I didn't.

Well, lo and behold, my university finally issued me a 1098-T this year with information from 2008 AND 2007, and it's all been reported to the IRS. What in the world do I do? I already paid taxes on 2007 expenses, and I don't want to double pay, but will the IRS audit me if I fail to pay for the 2007 portion reported this year? It's a huge mess and I'm not quite sure what to do.

Thanks in advance for any help you can give me.
Post edited by musely on

Replies to: Scholarships, 1098-t, and a mistake with last year's tax return

  • happymomof1happymomof1 Posts: 19,632Registered User Senior Member
    Option 1: File an amended 2007 form taking that money out, and file the 2008 with all of the money in.

    Option 2: Pick up the telephone and call your university and find out if they can send you corrected forms that separate the two years.

    Good luck!
  • thumper1thumper1 Posts: 38,457Registered User Senior Member
    Are you saying that the school put 2007 and 2008 CALENDAR year info on the same 1098T? That would be highly irregular. if that is the case, you need to call the school.

    Are you confusing the SCHOOL year with the CALENDAR year? If you had expenses from LAST school year that were in the year 2008....(even though they were from the 2007-2008 school year), the would be reported on the 2008 1098T.

    Any expenses from 2007 should have been on a 1098T for 2007.

    I'm not a tax expert...so if I'm wrong...someone, please correct me.

    Call the school and ask them
  • kmccrindlekmccrindle Posts: 1,650Registered User Senior Member
    I received two 1098s on my son's behalf for his dual enrollment as a senior (from our local college and our local university.) Here's something I noticed that may (or may not :) assist you.

    On one of them, because the grant was invoiced and paid in November of 2008, showed up on a 2008 1098, even though he did NOT start the class until 2009 and I expected a 1098 to be generated for 2009.

    Maybe what your school is showing on the 1098 is the amounts you actually PAID in 2008...not what actually happened in 2008. Eg., if you deferred payment from 2007 -- it reflected in 2008?

    Just a guess but take a closer look.
    Cheers,
    K
  • jjcddgjjcddg Posts: 508Registered User Member
    The following information is from the instructions for the hope (form 8863) and tuition deduction (form 8917) It actually says that the amounts on your 1098-t may be different than your actual payments/expenses, and to enter what you actually paID.



    You should receive Form 1098-T, Tuition Statement, from
    the college or university reporting either payments received in
    box 1 or amounts billed in box 2. However, the amounts in
    boxes 1 and 2 of Form 1098-T may be different than what you
    actually paid. On Form 8863, lines 1 and 3, enter only the
    amounts you paid in 2008 for qualified expenses.

    You should receive Form 1098-T, Tuition Statement, from the
    college or university reporting either payments received in box 1 or
    amounts billed in box 2. However, the amounts in boxes 1 and 2 of
    Form 1098-T may be different than what you actually paid. On Form
    8917, line 1, enter only the amounts you paid in 2008 for qualified
    expenses.

    MY SON'S 1098t for 2008 include tuition and expenses for both fall 2008 and spring 2009, because that's when it was billed. However, only a little more than half of his scholarship money was included on the 2008 1098-t because some of the scholarships were not credited until January of 2009. THerefore, I will be following the instructions on the forms and entering the actual amounts paid. I will however keep a copy of all tuition billsand payments in with my tax info in the event of a problem.
  • zabukes2005zabukes2005 Posts: 14Registered User New Member
    My sons 1098-T Box2 shows $39,084 for tuition Billed ($19,592 for FALL2010 & $19492 for SPRING2011). Box5 shows scholarships/grants as $21,848, however, after reviewing my sons Bursar acct/financial documents through the school, he actually received a total of $29,123 that was processed in 2010, of this amount $1,250 was applied in 2010 for Spring2011, the other $27,873 was used for Fall2010 (Room&Board=$8281 & tuition=$19592). All monies were handled & administered directly by the school. I was able to figure how the school came up with the reported amount of $21848. Basically the reported amount was university and state issued scholarships. The non-reported amount was Federal Pell & SEOG grants & (1) outside scholarship all totaling an additional $7275. My question is why the federal grants were not included on the 1098? and do I need to report these un-reported scholarships somewhere on the the tax form. Unsure which tax form will be suing, 1040A or EX?? If so where?

    Also, since ALL expenses, including room & board, were paid with scholarships/grants, we will not be eligible for any education credits, so when filling out the tax form do we just enter the taxable scholarship $$ in "wages & income" under less common income-scholarships? I think so but wanted to confirm. Do I enter reported amount listed above less the tuition fee which is $1005.50 (21848 minus 19592.50 minus 1250 (spr2011 tuition)=$1005.50) or do I include the non-reported scholarships with the reported less tuition (using the same formula)? Thank you for your help.
  • MomCat2MomCat2 Posts: 742Registered User Member
    When you say ALL expenses were paid w/ scholarships/grants, does this include required textbooks and supplies? If so, then you are not eligible for any education tax credits.
    But if you or your son (assuming he is your dependent for tax purposes) paid for any required books/supplies out-of-pocket OR with money that was from loans, then you, the parent, could claim an AO tax credit for that amount (provided you otherwise qualify).
  • calmomcalmom Posts: 16,839Registered User Senior Member
    Musely, it is ok if the 1098t's don't match up year to year with your tax returns, as long as you properly account for the money over time. Just keep all of your tax documentation together -- what will happen down the line is that you might get a letter from IRS saying that you under-reported. That letter will give you something like 30 days to respond in writing. Then you will write a letter back, explaining that part of the scholarship money had actually been disbursed the previous year, and you will attach a copy of your previous year's return showing where you reported it. IRS will probably go away.

    But IRS keeps track of paper from year to year on its own, and they actually have computers and calculators -- so you may never hear from them -- because they understand this problem. It happens all the time. It happened with my son, it happened with my daughter. We get 1098t's that don't match up with our own records as to when money was paid.

    (*My daughter just got lucky. I paid the tuition bill in fall of her senior year, but her college reported it for the following year, as it was for spring semester. But because she graduated and is supporting herself, she is no longer my dependent for tax purposes -- so I forwarded the 1098t to her with an explanation. In her case, the qualified expenses are much more than the college grant, so she gets to take a credit or deduction for money I paid the previous year.)

    So I'd bet that the IRS tracks these things on its own -- you probably won't have any problems.

    NOTE: I had this question years ago when I also had a CPA preparing my tax returns, so I asked my CPA. I'm telling you basically what he told me -- he said that I had a choice -- I could either treat the 1098t as accurate even though it was a semester off track, or I could rely on my own records -- both were legitimate. Obviously, though, I had to opt for one or the other.
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