<p>I’ve been scouring the Internet for the answer to this question and I seem to get a different answer from every source, so I’m wondering if some seasoned grad students here know how this works.</p>
<p>My 1098-T form shows two amounts, tuition paid to school (Box 1) and scholarships received (Box 5). I’m on a stipend so my tuition and fees are waived, and that includes mandatory student health insurance. So Box 5 includes the amount of my waived tuition + health insurance, and is about $2000 greater than the tuition amount from Box 1. But the tax rules say that if Box 5 > Box 1, the difference gets added to your taxable income.</p>
<p>I’ve gotten two responses from various sources online: 1) 1098-T is used to qualify for tax credits and is optional, so if you don’t qualify (I don’t) then you don’t need to report it, OR, 2) If Box 5 > Box 1 then you are required to report it since not reporting it is like not reporting taxable income.</p>
<p>Anyone here know how this works? Do I HAVE to report form 1098-T in this situation?</p>
<p>If I understand your question correctly, you are being paid your stipend and have health insurance and tuition remission provided by your program. I am in the same position and I have never paid taxes on the cost of the health insurance provided by the program. In fact, I have never filled out a 1098T for educational expenses as I do not pay tuition.</p>
<p>belevitt, YOU wouldn’t fill out a 1098T…THE SCHOOL fills it out and sends it to THE IRS and would send the STUDENT a COPY too. The form is really for the IRS, not the student, and is provided to the student for information and to keep the school honest. The 1098T is NOT filed with individual taxes and is used for information. The “information” is often misleading and is for an ACADEMIC YEAR not a CALENDAR YEAR (as is the usual individual filing period). Fortunately for the OP box 1 (amount PAID to the school) was filled in. Often box 1 is blank and box 2 is filled in instead which is the AMOUNT BILLED… which is a useless number for all students. Mostly students should ignore the 1098T completely. Look instead at your statements from the school. It will show you what you paid and when (so you can total it for the calendar year). It will show aid and amounts paid for health insurance through the school. Note that scholarship money that pays for room and board is considered taxable INCOME so you would pay tax on it (like all income). If the health insurance is paid for you and it is considered to be imputed income to you then you are taxed on it. If you are paying taxes on it then you can also deduct those expenses as well. Read the tax instructions yourself and any issues involving stipends or internships and payments for non-educational expenses and required fees, etc. are all covered. If you still have questions, you may get an answer at taxmama.com
The box 5>box 1 or box 5>box 2 stuff is false. You may have paid early for the spring semester (when billed) and your aid didn’t come in until January or February and may not be covered by the previous years 1098T… so box 5 (while technically “correct”) represented a different time period than box 1 or 2. In short you are trying to use the form for a purpose that it is NOT designed for. If it were designed to be used for your taxes aid would be matched to billing or payments. Actually billing would not even appear. Also it would be only a calendar year report. Ignore the form and note those tiny asterisks on e-file screens that say you may need to adjust the amounts from the 1098T.<br>
You do not file the 1098T with your taxes.</p>
<p>Yes, but the amount of your health insurance should be included under mandatory fees (since it is mandatory) and it should even out in the wash. Basically there should be a line on the form that includes tuition AND mandatory fees, since those are also deductible.</p>
<p>Not all mandatory fees are deductible. For example, Transportation Fees are often required as a condition of enrollment (i.e. are mandatory) but generally cannot be deducted.</p>
<p>Not adding anything earth shattering but CFB is right - anything you get from the school that isn’t tuition-related is taxable income. For more info look up publication 970 from the IRS.</p>
<p>For all intents and purposes, that money was paid to you by the school and you paid them right back for your health insurance; they just cut out the middle man. At least, I filed my taxes in that way. A little frustrating, but that’s the way the rules are worded.</p>