Short Answer 
The process involves entering payment information from Dana’s 1098-T, including $16,467 for tuition (Box 1) and $1,500 for scholarships (Box 5). Additionally, it’s important to check Box 8 to confirm her student status for eligibility for tax credits.
Step 1: Enter Payment Information
In your tax preparation software, start by inputting the details from Dana’s 1098-T form. This involves entering the amount received for tuition and related expenses in Box 1. Ensure you input the following:
- Box 1: $16,467 (Payments received for tuition and related expenses)
Step 2: Record Scholarship/Grant Information
Next, you need to include any scholarships or grants Dana received. This information is found in Box 5 of the 1098-T. It’s essential for determining her eligibility for potential tax credits. Be sure to input:
- Box 5: $1,500 (Scholarships/Grants)
Step 3: Check Student Status
Lastly, verify the status of Box 8 to confirm Dana’s eligibility for the American Opportunity Credit or Lifetime Learning Credit. A checked Box 8 indicates that she is classified as at least a half-time student. Make sure this is properly noted in your software:
- Box 8: Checked