So my wife finished her undergrad last year and started a master’s at a different school. She wants me to skip entering her undergrad 1098-T because our refund jumps from $700 to $3400 when we leave it out.
I think this is because the tuition was listed as $8600, but the scholarships were $20000. What I don’t get is why we still had to pay $1000 out of pocket for her last semester when the scholarship says $20000.
What would actually happen if we don’t include her undergrad school on our taxes?
If the numbers aren’t adding up, don’t file until you figure out why. Compare your records to the 1098-T. If something looks off, ask the school. They might have made a mistake.
Ali said:
If the numbers aren’t adding up, don’t file until you figure out why. Compare your records to the 1098-T. If something looks off, ask the school. They might have made a mistake.
Just a heads-up—your 1098-T only shows what was processed through the university, and sometimes they don’t count everything correctly. If you bought books or materials out of pocket, you can still add those to your qualified expenses. That could help reduce your taxable income.
Cameron said: @Van
I still don’t get how her scholarships were $12K more than tuition, but we still had to pay out of pocket. Where did that extra money go?
Probably a timing issue. Scholarships might have been credited in one tax year while tuition payments were made in another. Check her previous 1098-T forms—there might be a year where tuition looked way higher and scholarships looked lower. It balances out over time, but it’s only now that you’re seeing the difference.
That said, sometimes schools do report scholarships incorrectly. It’s rare, but worth double-checking.
Skyler said: @Van
Not all scholarships are taxable. Some cover more than just tuition, like books or fees. If that’s the case, you can subtract those amounts too.
Books and supplies? Yes. Room and board? No. I doubt books and supplies account for the full $12K difference.
@Van
Yeah, I wasn’t saying room and board were covered. Just pointing out that tuition isn’t the only qualified expense. But yeah, if the money went to rent or food, it’s taxable.
Skyler said: @Van
Yeah, I wasn’t saying room and board were covered. Just pointing out that tuition isn’t the only qualified expense. But yeah, if the money went to rent or food, it’s taxable.
The way you worded it made it sound like room and board could be tax-free.
Skyler said: @Tilden
I see what you mean. That wasn’t my intent. Just wanted to clarify that some expenses beyond tuition can reduce the taxable amount.
That makes sense. But since OP isn’t familiar with this stuff, it’s better to spell everything out clearly so there’s no confusion.
@Tilden
Fair point. To clarify—expenses like books and required fees can be deducted from taxable scholarships, but room and board are always taxable. Hope that helps.
Skyler said: @Van
Not all scholarships are taxable. Some cover more than just tuition, like books or fees. If that’s the case, you can subtract those amounts too.
If the scholarship covered rent or meals, that part is taxable. Only tuition, fees, books, and supplies are tax-free.
Did she only take one semester of undergrad in 2024? If there were multiple, it could be a timing issue. If winter tuition was billed in December 2023, but the scholarships for that term were applied in January 2024, the 1098-T might show two semesters’ worth of scholarships but only one semester’s tuition.
If that’s the case, some of the ‘extra’ scholarship money might have actually gone toward an earlier bill, which wouldn’t make it taxable after all. Double-check her payment history with the school.
@Jordy
The problem is that tax years go by when payments happen, not when classes take place. If tuition was paid in 2023, it can’t be used to offset a scholarship that was received in 2024.