Incorrect Box 5 on 1098-T

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Topic Author
erictiger
Posts: 38
Joined: Fri Apr 07, 2017 7:02 pm

Incorrect Box 5 on 1098-T

Post by erictiger » Fri Mar 16, 2018 11:39 pm

First time poster here. Tried to help daughter to file tax return and realized that the amount in 1098-T Box 5 was not correct. She has a full ride volleyball scholarship which covers 27K tuition + 8k room/board per semester. However, she only took one class on her last semester, instead of the usual 4 classes. Her 1098-T Box 2 has $34K tuition (27K first semester + 7K second semester) which seems correct. However, Box 5 has 70K (34K tuition + 16K room/board), instead of 50K (34K + 16K). Now she has to pay tax based on taxable income of 36K (70K - 34K), instead of 16K room/board.

The school realized this error but said nothing they can not do now. My daughter will receive a new 1098-T next year with adjustment (minus 20k) and will need to file 1040 amend.

I just wonder whether we can change the amount in Box 5 from 70K to 50K when she files tax this year.

Eric

Wagnerjb
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Location: Houston, Texas

Re: Incorrect Box 5 on 1098-T

Post by Wagnerjb » Sat Mar 17, 2018 7:33 am

Is the school going to include the correction amount in the 2018 form 1098-T? Or are they going to issue a corrected 2017 form 1098-T?

If they - for some reason - include the correction amount in with the 2018 form 1098-T, then I don't see how you can amend your 2017 tax return based on that document.
Andy

Topic Author
erictiger
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Joined: Fri Apr 07, 2017 7:02 pm

Re: Incorrect Box 5 on 1098-T

Post by erictiger » Sat Mar 17, 2018 11:16 am

Thank you Andy. Here is the information on 1098-T:
Box 6. Shows adjustments to scholarships or grants for a prior year. This amount may affect the amount of any allowable tuition and fees deduction or education credit that you claimed for the prior year. You may have to file an amended income tax return (Form 1040X) for the prior year.

We are hoping she can get the extra tax back next year. We have received 1098-T for the last 5 years and this is the only time we ever had issues. I have never filed 1040X before, and am not sure how easy the paper work is.

Eric

RudyS
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Re: Incorrect Box 5 on 1098-T

Post by RudyS » Sat Mar 17, 2018 1:29 pm

First time ever I had to file an amended return because I overlooked a 1099B transaction on the back of a page. I had been using TurboTax for years, and it was quite easy to do a 1040X. Only slightly complex issue was when I now did my 2017 taxes. Had to make sure TT pulled the amended return, not the original return, to get the carry forward info. You will need to file an amended state return too (MI is based on the Federal return).

Miakis
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Re: Incorrect Box 5 on 1098-T

Post by Miakis » Sat Mar 17, 2018 1:47 pm

I see 1098-Ts all the time that have incorrect scholarships on them. Most often, the problem is that they show the scholarships for based on scholastic year instead of calendar year, or like you said, they show maximum scholarship awarded but not what was actually received by the student.

I usually ask my clients to provide a print out from their school financial aid account that shows me exactly what was charged and exactly what credits were received and from where. I then use the true scholarship number (and the correct tuition number - because I sometimes find out that the tuition/fees number is also incorrect).

I've never had it cause problems for the client that we were mismatching the 1098-T. My professional tax software doesn't even include an exact match screen for that form. I'm not supposed to input the form exactly as written, I'm supposed to actually determine what the correct numbers are.

gradStudentInvestor
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Re: Incorrect Box 5 on 1098-T

Post by gradStudentInvestor » Sat Mar 17, 2018 1:50 pm

The 1098-T is often incorrect, especially for those who must pay tax on income such as education grants/scholarships in excess of qualified expenses (rather than those who claim credits or deductions based on qualified education expenses). As my university has stated when I've brought up issues with 1098-T forms they've issued, "Please note that the 1098-T is used for education credit purposes only, and is not to be used as a tax form."

Over many, many years of graduate school, I have always reported my actual net income associated with the university, rather than simply using the numbers from the 1098-T. I've never had any issues doing that.

Topic Author
erictiger
Posts: 38
Joined: Fri Apr 07, 2017 7:02 pm

Re: Incorrect Box 5 on 1098-T

Post by erictiger » Sat Mar 17, 2018 5:56 pm

Thank you All for the information. We do have the billing statements showing both tuition provided by athletic department ($27K) and tuition actually charged by school ($7K). In fact, currently there are $20K credit on my daughter's account. But I don't think we will actually get the $20K. It will be returned to athletic department for sure. (I would be happy to pay the income tax on the $20K if the school give it to my daughter).

Eric

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