Reporting scholarship and taxes paid on scholarship
My wife was on F-1 in Spring 2010 (graduating semester) pursuing PhD and she received $8,100 as fellowship/scholarship. And, $1,300 was deducted as NRA tax. She paid around $1,000 as tuition fees for that semester. She has not received a W-2 and no 1098-T was given as she was a non-resident alien.
After graduating, she started working in August 2010 for which she received W-2 with appropriate federal taxes withheld. Currently, she is on H-1. We are filing taxes as married joint status.
I was not sure how to report her scholarship income and if it has to be reported at all in the first place.
Should I deduct both taxes and tuition paid from the scholarship and then report it as wages; or report scholarship as wages, use tuition deduction if allowed and add taxes deducted from the scholarship to our total federal taxes?
Please advise!
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