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tax guide

How to Enter 1098-T Fellowship Stipend and Scholarship Income and Qualified Education Expenses into Turbotax

February 17, 2016 by Emily

Entering 1098-T information – scholarships, fellowships, and qualified education expenses – into TurboTax is very straightforward. The software should prompt you through the process fully under the ‘Deductions and credits’ section, or you can follow the steps below.

1. Under ‘Setup,’ choose ‘College expenses/tuition’ and then press ‘Continue.’

2016_1098T_1

2. Choose the ‘Federal Taxes’ and ‘Deductions and credits’ tabs and then press ‘Continue.’

1098T_step2

3. Then, press ‘Start’ to enter your 1098-T information.

1098T_step3

4. Select ‘yes’ to enter your higher education expenses.

1098T_step4

5. Click through the next four screens, entering your proper educational information, and concluding with reaffirming that you want to enter your 1098-T into the software.

1098T_step5a

1098T_step5b

1098T_step5c

1098T_step5d

6. Now, replicate your 1098-T information exactly in the software. In this example, I am using both the fellowship and scholarship income and the qualified education expenses for the hypothetical grad student. If the fellowship stipend were not reported on the 1098-T, the amount in Box 5 would be only slightly larger than the amount in Box 2.

2016_1098T_6

7. Click through the next four screens, entering your proper educational information. I selected that the income the hypothetical student reported on the 1098-T is not duplicated elsewhere on the tax return, like on a W-2 or 1099-MISC.

1098T_step7a

1098T_step7b

2016_1098T_7c

1098T_step7c

8. The next section is where you need to enter additional qualified education expenses such as required textbooks. The hypothetical grad student doesn’t have any, but you might.

1098T_step8a

9. In this step, TurboTax verifies that you entered your scholarship income (Box 5 on the 1098-T) correctly.

1098T_step9a

2016_1098T_9b

10. Sometimes universities bill qualified education expenses in a different semester from when they post the scholarships to pay for them. TurboTax asks in the next step if that is the case for your 1098-T, because the bill and scholarships can be pulled into the same tax year. The hypothetical student’s 1098-T doesn’t have this issue, but consider if yours does (e.g., the amount in Box 2 is approximately double that in Box 5 or vice versa).

1098T_step10

11. TurboTax asks if you used your scholarship income for room and board and other non-qualified education expenses. The hypothetical student did not, but your answer could easily be yes. (I tried answering this both ways, and the result was the same for my example.)

1098T_step11

12. Click through the next three screens, entering your proper educational information.

1098T_step12a

1098T_step12b

1098T_step12c

13. TurboTax pauses for a summary page in case you have more student information to add.

1098T_step13

14. TurboTax concludes that the hypothetical student can’t claim an education tax deduction or benefit. That is what we expected because the purpose of this 1098-T was to enter net non-compensatory pay rather than get a tax break.

1098T_step14

That’s it!

Check: Under tabs ‘My Account’ and ‘Tools,’ click ‘View Tax Summary’ and ‘Preview my 1040’ to verify that the income you entered was added to the correct line on your tax return. In this example, TurboTax generated a 1040A.

2016_1098T_check

Parent post: Grad Student TurboTax Guide: 2015 Edition

We at Grad Student Finances are not tax professionals, and none of the content in this section should be taken as advice for tax purposes.

 

How to Enter W-2 Stipend Income into TurboTax

February 17, 2016 by Emily

Entering your W-2 stipend information into TurboTax is very straightforward. The software will naturally prompt you to enter the information if you tell it you received a W-2, so you can follow its lead in this case.

2016_W2_1

Alternatively, follow the steps below:

1. Under the ‘Federal Taxes’ and ‘Wages & Income” tabs, click ‘Continue.’

W2_step1

2. Under ‘Wages and Salaries,’ click ‘Show More’ and ‘Start.’

W2_step2

3. Select ‘Work on my W-2 now’ and ‘Continue.’

W2_step3

4. In the next several screens, you will replicate the information printed on your W-2 in TurboTax. I have entered our hypothetical grad student’s income into the correct boxes.

2016_W2_4a

2016_W2_4b

Check: Under tabs ‘My Account’ and ‘Tools,’ click ‘View Tax Summary’ and then ‘Preview My 1040’ to verify that the income you entered was added to the correct line on your tax return.

2016_W2_check

Parent post: Grad Student TurboTax Guide: 2015 Edition

We at Grad Student Finances are not tax professionals, and none of the content in this section should be taken as advice for tax purposes.

 

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