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reading a 1098-T

The 1098-t shows the following $ box 1 Payments received for qualified ....$ 8100 box 18 Scholarships or grants ........... 18600

Using tubotax (tax year 2006), box 5 was added to 1040 line

7 as additional earnings and box 1 was used to calc the deduction/credit. Is this correct? The full scholarship is taxed and then reduced by either the deduction or credit? This is not my return so I don't have all the details but from the 1099-t can I assume that only part of the scholarship was used to pay for the qualified expenses? The taxpayer is on a teaching scholarship at the university. Tia for any help you can provide. Neil

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Reply to
bakern
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You can get varying opinions from the IRS on taxable scholarships. Start with the terms of the scholarship--what was it intended to cover? Then read Publication 970 for a definition of "qualifying education expenses" (for a degree-seeking student at an eligible institution)--there may or may not be additional expenses beyond what is reported on the 1098-T. But the terms of the scholarship must be examined.

Reply to
Brew1

Scholarships may or may not be fully or partially taxable. Its one of those "it depends" on facts & circumstances.

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Reply to
Benjamin Yazersky CPA

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