Form 1098-T Confusion: Reporting $6,725 Tuition vs $3,748 Aid When I Paid Nothing Out of Pocket
I received a 1098-T form from my university but I'm confused about how to report it. The form shows Box 1 (Payments received for tuition and related expenses) with $6,725 and Box 5 (Scholarships/grants) with $3,748. I got full financial aid and didn't pay anything out of pocket for tuition, but these numbers don't seem to reflect that. I'm in the middle of trying to do my taxes (about 1 hour and 55 minutes in so far), and I'm stuck on this form. The software is asking me to enter these values, and I've put in the $6,725 for Box 1 and $3,748 for Box 5. Box 4 (Adjustments made for prior year) and Box 6 (Adjustments to scholarships/grants) are both empty on my form. The difference between Box 1 and Box 5 is $2,977, but I didn't actually pay anything myself as all my tuition was covered by financial aid. I'm not sure why the numbers don't match up completely. Do I even need to report this on my taxes since I didn't actually pay anything myself? Or is this difference of $2,977 something I need to report as income? I'm really confused about how to handle this.
15 comments
Join the conversation
Maya Patel
Yes, you need to report this on your taxes! The 1098-T shows the total amount of qualified education expenses and any scholarships/grants received. Even if you didn't pay out of pocket, you still need to report it because it affects your taxable income calculation. Some scholarship money might be taxable if it exceeds qualified expenses.
0 coins
Isabella Brown
•wait fr? even if i didnt pay anything? 🤔
0 coins
Maya Patel
•Yep! The IRS wants to know about all your education expenses AND your financial aid. It could affect other education credits too.
0 coins
Aiden RodrÃguez
Hey there! Instead of trying to piece this together, I'd highly recommend using taxr.ai - it's this new tool that analyzes your tax docs and tells you exactly what you need to do. It's only $4.99 and saved me so much headache with my education credits. Check it out at https://taxr.ai
0 coins
Emma Garcia
•is it legit tho? seems sketchy to share tax docs online 👀
0 coins
Aiden RodrÃguez
•Totally get the concern! But its super secure and encrypted. Plus it saved me hours of research and confusion
0 coins
Ava Kim
•Just tried it myself - holy cow its amazing! The AI explained everything about my 1098-T situation in like 2 minutes 💯
0 coins
Ethan Anderson
i was in the same boat last year and didnt report it...now im getting letters from the IRS ðŸ˜
0 coins
Layla Mendes
dont skip reporting this! my sister thought the same thing and ended up owing penalties when they caught it
0 coins
Isabella Brown
•omg ty for the warning! def dont want that smoke with the IRS 🤮
0 coins
Lucas Notre-Dame
Box 5 > Box 1 = maybe taxable scholarship. Box 1 > Box 5 = possible education credit. Either way gotta report it fam
0 coins
Aria Park
lol the IRS wants to know EVERYTHING even if u paid $0
0 coins
Noah Ali
•fr fr they be nosey af 🤣
0 coins
Isaiah Thompson
The confusion makes total sense! Here's what's happening: Box 1 ($6,725) shows what your school received for tuition, and Box 5 ($3,748) shows scholarships/grants they processed. The $2,977 difference likely represents other financial aid (like loans) that covered the rest. Even though you paid $0 out of pocket, you still need to report this because the IRS uses it to determine if you qualify for education credits and whether any scholarship money is taxable. The good news is since your scholarships ($3,748) are less than your qualified expenses ($6,725), you probably won't owe taxes on the scholarship money. Just enter the numbers as they appear on your 1098-T and let the tax software do the calculations!
0 coins
Dylan Hughes
•This is super helpful! I was getting so stressed about the mismatch between the numbers. So just to confirm - I enter the $6,725 and $3,748 exactly as shown on the form, and the software will figure out if I owe anything or qualify for credits? And the $2,977 difference is probably just other aid like loans that aren't considered taxable income?
0 coins