Anyone here good at taxes? 1098T madness

[JelloStorm]

So on my wife's 1098T, on box 5 (Scholarships and Grants) she has say $5000.00

On box 2 (Amounts billed for qualified tuition and related expenses) say the tuition was $2000.00.

She used the $3000 from financial aid while going to school full time and not working.

My tax rep is giving me a hard time saying this might be taxable income, but I fail to see how considering she has to pay it back. Any financial assistance is just a loan, so how can it be taxable income?

Does the 1098T need to be corrected or what? This shit will make my head explode....

 

[Maggot]

Re: Anyone here good at taxes? 1098T madness

<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: JelloStorm</div><div class="ubbcode-body">So on my wife's 1098T, on box 5 (Scholarships and Grants) she has say $5000.00

On box 2 (Amounts billed for qualified tuition and related expenses) say the tuition was $2000.00.

She used the $3000 from financial aid while going to school full time and not working.

My tax rep is giving me a hard time saying this might be taxable income, but I fail to see how considering she has to pay it back. Any financial assistance is just a loan, so how can it be taxable income?

Does the 1098T need to be corrected or what? This shit will make my head explode....

</div></div>

From my memory, there are two types of Financial aid. Grants, and loans. A grant is an outright gift, and would be taxable. The loan, probrably not.

 

[Red Mule]

Re: Anyone here good at taxes? 1098T madness

Scholarships grants and fellowships that are used to pay tuition, fees, and expenses such as for books/equipment are not taxable. If the funds are used for living expenses, room/board, meals then it would be. Talk to your tax practioner and refer them to IRS Publication 970, which will provide all the guidance he/she should need.

Scholarships, grants and fellowships are generally not repaid, student loans are. Proceeds from a student loan are not generally report on a Form 1098T or a Form 1099.

Hope this helps.