How to handle 1098-t form with amount in box 6 this year

This is a common question with 1098-T forms! Box 6 represents adjustments to scholarships or grants from prior years. Think of it as a correction to what was previously reported. For your situation, you'll want to adjust your calculation. The correct approach would be: Box 5 - Box 1 - Box 6 = Taxable scholarship income. Since Box 6 represents scholarship/grant money that was already accounted for in a previous tax year, subtracting it prevents you from being taxed twice on the same funds. Make sure you're reporting the taxable scholarship portion on the correct line of your tax return - it should go on the income section with "SCH" written next to it to identify it as scholarship income.

Just wanted to share my experience with this exact situation. I was super confused about Box 6 on my daughter's 1098-T and wasted hours trying to figure it out. I found this amazing tool at https://taxr.ai that helped me understand exactly how to handle it. You upload your 1098-T and it breaks down exactly what each box means for your specific situation. It explained that Box 6 is an adjustment to prior year scholarships and showed me the exact calculation I needed to use. Saved me so much stress and I'm confident I reported everything correctly. Might be worth checking out if you want to be 100% sure!

I was really skeptical about the taxr.ai tool mentioned here, but after fighting with my daughter's complicated scholarship situation for hours, I decided to give it a try. Honestly, it was incredibly helpful! It immediately identified that her Box 6 amount was related to a scholarship adjustment and gave me the exact formula to use (Box 5 - Box 1 - Box 6). It even explained that the school had reclassified some of last year's scholarship funds, which is why Box 6 had an amount this year. The breakdown it provided helped me understand exactly what to report and where. I was definitely calculating it wrong before. If you're confused about education tax forms, it's worth checking out.

If you're having trouble getting answers about your 1098-T situation, you might want to try Claimyr (https://claimyr.com). I had similar confusion last year and spent DAYS trying to call the IRS for clarification. Kept getting disconnected or waiting for hours. Used Claimyr and got connected to an actual IRS agent in less than 20 minutes who walked me through exactly how to handle scholarship adjustments on my return. They have a video showing how it works: https://youtu.be/_kiP6q8DX5c The agent explained that Box 6 adjustments are pretty common and schools often make corrections to prior year amounts. Saved me so much frustration compared to my previous attempts to get through to the IRS!

I can't believe I'm saying this, but I tried the Claimyr service and it actually worked. After my skeptical comment, I was desperate enough to try anything because I had some complex questions about my daughter's scholarship situation that online research wasn't answering. The service called me back in about 25 minutes with an actual IRS agent on the line. The agent explained exactly how to handle the Box 6 adjustment on the 1098-T and confirmed that I needed to subtract it from the calculation to avoid double taxation. She even walked me through where to report it on my return. For anyone struggling with specific tax questions that Google can't answer clearly, being able to actually talk to the IRS without the 3+ hour wait is honestly worth it.

Just a heads up - make sure you're also looking at Box 4 on the 1098-T! If there's an amount there, it means the school adjusted (probably increased) the tuition reported from a previous year. In that case, you'd need to add Box 4 to your calculation: (Box 5 - Box 1 - Box 6 + Box 4) for the correct taxable amount. I learned this the hard way when I got audited two years ago. The IRS agent pointed out that I hadn't accounted for the Box 4 adjustment and ended up owing additional taxes.

Don't forget that the taxable portion of scholarships is usually reported as income but it's not subject to self-employment tax. My tax software kept trying to add SE tax until I figured out how to code it properly as "SCH" income.

I had a similar situation last year and want to add one more consideration - make sure to check if your wife received any stipends for teaching or research assistantships that might be reported separately from the scholarship amounts. These would typically show up on a W-2 or 1099 rather than the 1098-T, but they can affect how you calculate the taxable portion of scholarships. Also, since you mentioned not claiming education credits, just double-check that you're not missing out on the American Opportunity Tax Credit. Even with full scholarship coverage, sometimes there are eligible expenses like books or equipment that weren't paid directly by the scholarship that could qualify you for at least a partial credit. The Box 5 - Box 1 - Box 6 calculation that others mentioned is definitely the right approach for your situation. Just wanted to make sure you're considering all the pieces of the education tax puzzle!

One thing to keep in mind for future tax years - if your wife's scholarship situation changes (different amounts, new funding sources, etc.), the Box 6 adjustments can sometimes carry forward for multiple years. I've seen cases where schools make corrections that affect 2-3 subsequent 1098-T forms. It's worth keeping a simple spreadsheet tracking the Box 5, Box 1, and Box 6 amounts each year along with your calculated taxable income. This makes it much easier to spot patterns or catch errors if you get another unexpected Box 6 amount down the road. Also, since you're dealing with taxable scholarship income, make sure you're considering estimated tax payments if the amount is significant. The IRS expects taxes to be paid as income is earned, so if you're getting a large tax bill each April due to scholarship income, you might want to look into making quarterly payments to avoid underpayment penalties.