I was able to get documentation! But I had to be persistent and specific in my request. I emailed the bursar's office, financial aid, AND my department chair, explaining that I needed written confirmation that the Box 6 amount represented an internal transfer of funds and not additional scholarship money provided to me. After about 3 follow-ups, the university financial services director finally sent me a letter stating that the Box 6 amount was "an administrative adjustment representing internal fund transfers between university accounts that does not constitute additional funds disbursed to the student." I attached this to my tax return along with a brief statement explaining why I was only reporting the net scholarship amount.

Thank you! This is exactly what I needed to know. I'll draft a similar email today and start pressuring all three departments. I already tried just asking the bursar's office but they gave me a generic response that wasn't helpful at all. I'll be persistent and make sure to specifically request confirmation that it's an internal transfer, not additional scholarship money. Hopefully having something in writing will protect me if there are any questions about my return.

I had the same issue with TurboTax! What worked for me was entering the full amounts in both Box 5 and Box 6 as requested, but then going to the "Other Income" section and making a negative adjustment labeled as "1098-T Box 6 adjustment for internal fund transfer" to offset the double counting. This way the correct net amount gets reported. If you use another tax software, the process might be different, but the principle is the same - you need to make a manual adjustment somewhere to ensure you're only taxed on the net scholarship amount.

Thanks for this info! That's really helpful. Would it be better to wait until March then? Or is mid-February generally safe enough? I'm trying to balance getting it done early vs avoiding problems.

Mid-February is typically safe enough in my experience. By then, the IRS has usually worked out most of the early filing season kinks. March is completely fine too if you're not in a rush. Anytime between mid-February and the April deadline should give you smooth processing. Just make sure if you're filing a protective return that your statement is very clear about your intentions and the legal basis for your position. That clarity is more important than the exact filing date.

Yes, attaching a PDF statement works fine! I did this last year. Just make sure you title it clearly like "Form 1120-F Protective Filing Statement" and reference it somewhere in the return itself if possible. The IRS does look at properly labeled attachments.

Do these ghost preparers ever get caught? Seems like they're scamming a lot of people and the IRS should be all over this.

Yes, the IRS does prosecute these preparers when they catch them, but it's challenging because many operate informally through social media and don't leave much of a paper trail. They often use temporary contact information, prepaid phones, and don't properly sign returns as preparers. The IRS has been conducting a nationwide crackdown on fraudulent preparers, with some high-profile prosecutions resulting in prison time and heavy fines. However, they can't catch everyone, which is why they focus on educating taxpayers about the risks. Remember, even if a preparer completes your return, YOU are legally responsible for all information on it and any resulting penalties.

That's true, but most people making $78K like OP wouldn't qualify for EITC, right? I think there's an income limit that's much lower.

Thanks for pointing this out about the interest! I didn't realize it was that high. Do you happen to know if the interest rate changes during the extension period, or is it fixed at whatever rate it is when I file the extension?

The IRS interest rate can change quarterly. It's tied to the federal short-term rate plus 3 percentage points. The rate was just adjusted in April, so it should stay at 8% through June, but could change in July. The interest compounds daily, which is why making even a partial payment now helps so much. Every dollar you pay reduces the principal that the interest is calculated on. Many people don't realize this and end up paying hundreds or even thousands more in interest than necessary by waiting until the October deadline to pay anything.

You don't need to pay for filing an extension! Go to IRS.gov and search for "Free File Fillable Forms" - you can file Form 4868 for free directly with the IRS. Turbotax and other tax prep companies are notorious for charging for things you can do for free.

12 But can you deduct losses that occurred in different states against winnings in other states? Like if I won $1000 in New Jersey but lost $800 in Pennsylvania, can I report just $200 net winnings to New Jersey?

5 That's a great question. Unfortunately, gambling losses and winnings are generally treated separately for state tax purposes. You typically need to report the full winnings to each state where you had them, and then deduct losses on your federal return and potentially your resident state return if they allow it. States generally don't allow you to net your gambling winnings and losses across state lines. So in your example, you'd likely need to report the full $1000 to New Jersey on your non-resident return, while the $800 Pennsylvania loss would be part of your itemized deductions on your federal return (subject to the limitation that you can only deduct losses up to the amount of your total gambling winnings).

8 Technically yes, but realistically the states probably won't come after you unless you had major winnings. The sportsbooks are required to issue W-2Gs for large payouts (usually over $600) though, and those get reported to tax authorities.