Yes the only thing we were able to deduct was books. We also were not able to deduct the tuition we paid which was for study abroad. She received $6k scholarship money for study abroad and we paid $4.7k study abroad tuition, room, flights, etc. but we couldn’t deduct that tuition because it wasn’t a US school. Too bad it wasn’t a reciprocal relationship where her school paid her study abroad tuition directly instead of giving us the scholarship for the study abroad, having us pay the tuition, then we pay taxes on the scholarship, then we wouldn’t have this situation, but at least all we are paying is the taxes on the scholarship for the study abroad. We still come out ahead. All the rest of her tuition was paid directly by her school, tax free.
These are good points to keep in mind about the study abroad programs, Shelleee. I’ll definitely look into how this will be handled at DS’s school.
My note probably wasn’t clear. The tuition was $4.7k. The flights were on top of that. We spent more than the scholarship. But my point was hopefully clear that we couldn’t deduct the tuition because it wasn’t a US school (of course, because it was study abroad). But some study abroad programs ARE actually affiliated with a US school, so you MAY actually be able to deduct them, I get the impression it is a case by case basis. And also some schools where you are on scholarship if you do a whole semester abroad will pay your tuition to the study abroad school instead of to your home school. This was not our case because she did a summer program in New Zealand.
My D did study abroad in Spain last year. Her scholarship to the OOS school she goes to could not be used. There are study abroads that we’re taught by professors from her school and those would have been covered, but they did t apply to her major. She wa able to make it woke by taking a few extra classes each quarter and then her study abroad was on the semester system, so she didn’t need to go back to school for her final trimester. It ended up costing us the same for the whole year as it would have she not done the program.
@shelleee thanks for pointing this out - we aren’t to the whole study aboard thing yet but I just assumed the whole $6k would be taxable. When the time come I’ll see if DS can find an exchange program where he can pay UTD and make the tuition part not taxable. We are still working on DD18’s taxes and it looks like she just may have, with a combination of earning and money from her personal savings, paid for more the 50% of her support for 2017. She’s still running the numbers though but if she can claim her self she can avoid the kiddie tax on her taxable scholarships. It’s going to be close because of what we’ve paid out of our HSA on her behalf. This would be so much easier if you could use scholarships in the support calculations!
Yes @3scoutsmom, the whole 6k is taxable in our case from UTD because she went to a New Zealand college during the summer for a study abroad program. Sorry if I’m still not being clear. I don’t think we can pay UTD with the $6k NMF Scholarship, But might be worth looking into? What my daughter was going to try to do was a second study abroad where she did a whole semester abroad and then UTD would maybe pay her scholarship tuition to the study abroad college instead of paying her UTD tuition. I have heard that is an option at some colleges, at least it seemed to be presented that way at some of the tours we have gone to with DD18 with some of the honors programs.
@shellee you were clear! DD18 is doing a semester aboard at the University of Hamburg it is a true exchange program at OU. She pays regular tuition and fees to OU. Those are not taxable, OU NM scholarship gave her $2K which covered airfair (taxable) and her department gave an additional scholarship to cover some of the additional expenses (taxable).
@mommdc seems to be the resident tax expert on taxes on this board. She answered some tax questions I had before. I think Scholarships don’t count as income. Also I think it might have been @mommdc who mentioned maybe the kiddie tax is getting relaxed somewhat in the new tax law starting in 2018 so that will be helpful. It has really dinged my DD16 for her 2016 and 2017 filings. With this new surprise on the Pell Grant and her study abroad scholarship with the tuition we were surprised we couldn’t deduct from the study abroad because it wasn’t a US school, double whammies all around, she had over $24k in taxable scholarship money! This didn’t count the tuition scholarships, just the Pell Grant, study abroad, room and overall scholarships. Of course, we are grateful for the scholarships, but she is really upset because she earned the scholarships, she doesn’t feel like the government should tax her on it as income. Especially the Pell Grant for low income students.
@sekere62 – I mentioned the same thing last night, before the USC results came out, to D18 and her friend (these are top notch kids, ACT 35 and 36, ECs, etc.).
What’s also interesting is the GT admission. It’s the outlier so far for D18. You would think that a serious, engineering type of school wouldn’t go for a kid like her. Her essays were personal and risky (according to CC conventional wisdom). I think I mentioned before that her AP Lit teacher read her Common App and said, “people who read it will know you”. I’m very proud of her for sticking to her guns in this process even though it hasn’t been pleasant lately. She’s impossible to “package”. I’m behind her 110%.
@mommdc or anyone else who may know…I’m looking for clarification on tax deductions/credit and I realize rules could change.
As it stands now, I read not to pay completely with a 529 and, instead, make sure you pay $4,000 from savings (if possible) in order to qualify for the tax credit. My question is: If you pay from a combination of 529 and private student loan (disbursed directly to the college) are you eligible for the deduction(s) or credits such as American Opportunity Tax Credit or Lifetime Learning?
In other words, does loan money qualify for a tax deduction/credit beyond student loan interest deductions or do I need to pay “cash” in order to claim the credit? Thank you.
@Kayak24, yes I believe loans count as paying out of pocket.
https://www.irs.gov/credits-deductions/individuals/qualified-ed-expenses
@shelleee $24,000 in taxable scholarships seems a lot. If your D was doing the study abroad in the summer, didn’t she have other tuition for her US school?
I’m far from a tax expert, but have been dealing with these tax matters for a few years now.
The standard deduction for single taxpayers (hopefully dependents too) is supposed to almost double in 2018, and I think kiddie tax is figured no longer by parent highest marginal tax rate, but trust rates (not sure if that is good or not).
But hopefully the higher standard deduction will cause less of the taxable scholarship to be subject to kiddie tax.
@Kayak24 The student loan interest deduction won’t come into play until the loan is in (required) repayment I think.
Happy to report my S18 did get into USC.
Risky, but we toured yesterday (before he had his decision) because it was the only time we could do it while in California for Spring Break.
@Booajo congratulations to your S! It’s so good to hear some happy news.
I just found this thread. I am so happy that all of the college decisions will be out soon. This has been a very busy year! I also have a rising junior and rising freshman so really no breaks for me. 
For those who applied to California schools, you might find this interesting: https://www.insidehighered.com/admissions/article/2018/03/26/reports-circulate-even-more-difficult-year-be-admitted-leading
@ARIVERA1, stop by 2021 board when you want to to. I have a 21er also. I love following these boards. I feel as I get to know the parents and kiddos. I love rooting for everyone!!! And of course a wealth of info is here. @Booajo Congrats!!! That is HUGE
S18 admitted to USC on Saturday with the big white box moment. It was pretty cool. We thought he had a great chance for admittance to the school in general based on his stats and bc his older sister is a junior there, if he were an undeclared or larger major. His major is so tiny (8-10 enroll each year) that we expected a rejection.
Also waitlisted at UNC, but he showed little interest there so no biggie.
Now all decisions are in, and he gets to make the decisions now!