Hello,
I have a question regarding using 1098-T for filing taxes.

I came to the United States in 2003.
2003 through 2005 === F1 Visa
2005 through 2006 === OPT
2006 through July-2009 === H1B
July 2009 Onwards === Back on F1 visa

However, since I have been in this country for over five years, I believe, I can chose to file my taxes as a resident. (Am I right?).

For the part of FY2009 that I was on F1, I have been a Graduate Research Assistant (GRA), through which, I receive out-of-state tuition waiver, in-state tuition scholarship and monthly stipend. I am using TurboTax software to complete my taxes and I had a few questions regarding the Educational Credits. I am not very clear about using form 1098-T. But filing as a resident, I am allowed to use educational credits, is that correct?

After entering all the necessary information from the form 1098-T, the software asks me following questions:

Out of $XXXX that was billed by your school, how much of this was actually paid to the school?
I believe the amount I enter here will be subtracted from the taxable income for the FY2009, correct?
Supplemental information on 1098-T includes all payments made in Tax Year, which is less than the billed amount since the amount billed also includes charges for the Spring 2010 semester. Additionally, the charges include recreation fee, Technology Fee, Student Services fee, which may not be deductible.


The total 1098-T Box 5 Grants and Scholarships you entered is $XXXX. Was this amount tax-free?
I believe that if this amount was paid to me as part of my stipend, I must have been taxed for it, and it would have been reported on my W-2 (as part of my income) and tax was withheld for it. However, if it was used to pay for my tuition or fees, it may be tax-free and I might have to report it.

Any expenses that are not included in the 1098-T?
I do not think so, but I am not sure.Would there be any?

Thank you for any responses and help!

For 2009 you will file resident tax return. You can claim tuiton and fee deduction or education credit if you meet the requirements.

If you are a degree candidate and if the financial aid (includes scholarship and fellowship) is for tuition fee, other fees, books, supplies and equipment, then it is not taxable. For a degree candidate aid for boarding and travel are taxable. If you are not a degree candidate, then all the financial aid is taxable Scholarship and fellowship grants, Your U.S. Tax Return: The U.S. Income Tax Topics 1 (http://taxipay.blogspot.com/2008/08/us-income-tax-topics-1.html)

For 2009 you will file resident tax return. You can claim tuiton and fee deduction or education credit if you meet the requirements.

If you are a degree candidate and if the financial aid (includes scholarship and fellowship) is for tuition fee, other fees, books, supplies and equipment, then it is not taxable. For a degree candidate aid for boarding and travel are taxable. If you are not a degree candidate, then all the financial aid is taxable Scholarship and fellowship grants, Your U.S. Tax Return: The U.S. Income Tax Topics 1 (http://taxipay.blogspot.com/2008/08/us-income-tax-topics-1.html)

I am a bit confused about the words, "taxable" and 'tax-free'. I am a degree-seeking candidate since I am studying to earn PhD. And the scholarship I get, which is mentioned on the 1098-T is directly paid to the school for my tuition. Additionally, I pay over $1000 per semester as comprehensive fee (which includes recreation fee, etc. which I don't think I can claim as education expense). However, after entering my 1098-T in TurboTax, it asks me to enter the Box 5 amount on the next page again, if it was tax free. If I added that amount assuming it was tax-free, TurboTax considers it as income, and my refund goes down. What is the right thing to do ?