Another 1099-T Question

[jmallard]

[Excuse my typo in the Title - Should have been 1098-T - Couldn't find a way to delete and re-enter my post and can't edit the title]

A bit confused on the 1098-T form.

If Box 1 (Payments received. . .) is $6000.00 and Box 5 (Scholarships or grants) is $5000.00, what is the amount that goest to Form 8863? $1000.00 ?

Do you subtract the Scholarships or grants from the Payments received?

Thanks in Advance.

Jerry

[Tax Prep by Deb]

Actually the way I understand it you need more information. Your client needs to provide you with actual amounts they paid.

I would apply the scholarship or grant to books tuition ect. (there is a list of items that grants, scholarships can be used for).

Remember that the education credits for the most part only apply to tuition and related fees, not to books, equipment, ect... that the student may be required to purchase for the classes. That's were the grant/scholarship comes in. It can be used for several different expenses. Expense it out first. It could actually end up with the student paying more out of pocket for tuition and able to take a larger deduction.

Please correct me if I'm wrong, as this is just my take on this situation. I have very few clients who do anything more than community college, very limited!

Deb!

[jmallard]

Deb,

Thanks for your response, sorry mine is late

In my senario I did learn that the Box 5 Scholarships amount has to be deducted from the Box 1 amount.

Further checking with my client revealed an additional $1040 paid in Tuition and Fees, so that helped.

Thanks again for your help.

Jerry