PronghornD Posted March 29 Share Posted March 29 (edited) Has anyone had trouble with the last semester of college for their kids' taxes and scholarships? Our child had a full tuition scholarship. So, the tuition payment for that last spring semester is listed as being in 2022 and the scholarship payment is listed for 2023. That makes for a taxable income of $20,000+ for the first half of 2023. Has anyone had this problem and solved it? It appears it goes way back to freshman year's taxes, when they must have counted the payment for fall semester and spring semester in the same year, even though they'd only gone to school for half of that year. Edited March 29 by PronghornD 1 Quote Link to comment Share on other sites More sharing options...
PronghornD Posted March 29 Author Share Posted March 29 So, no one else has had this problem? I guess our kid went to the wrong school!!!! Quote Link to comment Share on other sites More sharing options...
Beth S Posted March 29 Share Posted March 29 Our kids' scholarships were given out by the universities, so they were included in the Form 1098-T. I would contact the financial aid department at your kid's school. 2 Quote Link to comment Share on other sites More sharing options...
TexasProud Posted March 29 Share Posted March 29 Yeah contact the school as it sometimes appears that way, but isn't that way. I am not sure how our accountant handled it to be honest. But we counted it for the semester it paid for. Quote Link to comment Share on other sites More sharing options...
BusyMom5 Posted March 29 Share Posted March 29 I have 2 in college and they each do it differently. Kid1 school puts the entire year onto the Fall Year 1098-T (also has full ride, so owes taxes on part of it). Spring tuition is due in late December, so both are billed in that same year. Kid2 school bills Fall Year for fall tuition only. They bill Spring tuition the following spring, it's billed in mid-January. The 1098-T had only Fall tuition included. I expect the next year to have Spring 24 and Fall 24 on it. We decided to wait on the AOTC for that kid bc she plans grad school. You are saying they billed it in the fall year, but dispersed it in the Spring year? I would call the financial aid office and ask to speak with a higher up. Quote Link to comment Share on other sites More sharing options...
PronghornD Posted March 29 Author Share Posted March 29 1 hour ago, Beth S said: Our kids' scholarships were given out by the universities, so they were included in the Form 1098-T. I would contact the financial aid department at your kid's school. Ours is too, and I am the original poster. The tuition payment for the last spring semester of college shows in the fall of the previous year. The scholarship shows in the following semester. That leaves our kid with $20,000 or so in income for the spring semester of 2023, with no corresponding tuition payment in that year. The problem goes all the way back to 2019, when this kid started college. We did not notice it, but that first fall semester, the 1098 showed two semesters worth of payment on the 1098 but one semester of scholarship. And, of course, since our child had a full tuition scholarship, we did not pay tuition at all. Oddly, the college is saying they paid the tuition before the scholarship was dispersed. 1 Quote Link to comment Share on other sites More sharing options...
Acadie Posted March 29 Share Posted March 29 Oy, sorry you have to deal with that. I'd be on the horn with the director of financial aid and our CPA. That just can't be the way full tuition should work. Quote Link to comment Share on other sites More sharing options...
Beth S Posted March 30 Share Posted March 30 (edited) Maybe another option would be to file amended tax returns! ETA: (And make sure your student includes the out-of-pocket essential educational items they bought, for the Education Credits.) Edited March 30 by Beth S Quote Link to comment Share on other sites More sharing options...
PronghornD Posted March 30 Author Share Posted March 30 2 hours ago, Beth S said: Maybe another option would be to file amended tax returns! ETA: (And make sure your student includes the out-of-pocket essential educational items they bought, for the Education Credits.) I think this is a good idea, but my husband does not like it. I think we'd need new 1098s for 2019-2023, which the university may or may not be willing to do. And then I'd have to get my husband to redo all the taxes. (He's the one familiar with the software.) Or we'd have to pay someone. I haven't paid anyone to do taxes for years. I wonder if how much we'd gain if we paid someone to redo five tax returns to avoid $1700 in taxes. Quote Link to comment Share on other sites More sharing options...
PronghornD Posted March 30 Author Share Posted March 30 Update: With further investigation, it appears that the 1098s only are required/intended to be used for educational tax credits. More than one source we have found says that we can actually use our own financial records to determine how much of the scholarship received is income. So, we are subtracting the tuition from the scholarships received and probably using that number as income. It is ridiculous how hard this stuff is to figure out! A college giving a full-tuition scholarship to a student should not be allowed to record tuition being paid (we paid nothing, so this is just them moving their own money about or pretending to!) prior to the scholarship being dispersed! 2 1 Quote Link to comment Share on other sites More sharing options...
teachermom2834 Posted March 30 Share Posted March 30 I can’t help you but I absolutely agree that the way this is reported by the colleges is ridiculously confusing. The years we had three different colleges we were dealing with were very difficult. And all the instructions say something to the effect of “what the colleges report on the form may not be accurate.” Quote Link to comment Share on other sites More sharing options...
Acadie Posted March 30 Share Posted March 30 3 hours ago, PronghornD said: Update: With further investigation, it appears that the 1098s only are required/intended to be used for educational tax credits. More than one source we have found says that we can actually use our own financial records to determine how much of the scholarship received is income. So, we are subtracting the tuition from the scholarships received and probably using that number as income. It is ridiculous how hard this stuff is to figure out! A college giving a full-tuition scholarship to a student should not be allowed to record tuition being paid (we paid nothing, so this is just them moving their own money about or pretending to!) prior to the scholarship being dispersed! Are you subtracting fees as well, in addition to tuition? My understanding is that scholarship funds that cover tuition and fees aren’t taxable, but funds applied to room and board are. Books and educational supplies are qualified expenses as well, I believe. We keep receipts for the tax credit. Quote Link to comment Share on other sites More sharing options...
PronghornD Posted April 1 Author Share Posted April 1 On 3/30/2024 at 4:25 PM, Acadie said: Are you subtracting fees as well, in addition to tuition? My understanding is that scholarship funds that cover tuition and fees aren’t taxable, but funds applied to room and board are. Books and educational supplies are qualified expenses as well, I believe. We keep receipts for the tax credit. Thanks. We did include the fees. As a music major, my kid had very little in the way of books, though. 2 Quote Link to comment Share on other sites More sharing options...
Recommended Posts
Join the conversation
You can post now and register later. If you have an account, sign in now to post with your account.