Finally started to dig into the tax implications today. As @GoldenRock mentioned, our D owes less when not subjected to our tax rate via the “kiddie tax”. Even though we lose the deduction of claiming her as a dependent, it saves over half of her tax obligation. I do have a couple of questions, though, that I wonder if anyone has figured out:
I understand that we need to file OK state tax (along with home state tax for any earned income) because they earned more than $1000 in OK. Do we include the entire amount of their scholarships: the amount on the 1098-T and the 1099-MISC? Do we only pay tax on the scholarship portion that went to room and board? I think that is accurate, but it seems like that amount should be separated somehow on the form.