Right. On the kids return, schedule 1 has the taxable scholarship. And kids under 24 fill out the form 8615.
Not sure what is going wrong. You can use FreeTaxUSA and basically fill out forms. There’s an interview but I found it much more straightforward than Turbo Tax.
They do ask for the 1098T on the parent return, in order to get the American Opportunity Tax Credit. That’s how it’s handled by Turbo Tax. But the income goes on the student’s form.
It’s also confusing because on the student return it may be income, but the information is entered under “deductions and credits”. The first year, it took me a good 20 minutes to find where I had originally entered the 1098T form.
deleting my response because I was confusing threads.
Only the amount of the grant that exceeds tuition and qualified fees is taxable. And that can be reduced by qualified expenses (like books and lab supplies). Even so, that might result in an unanticipated tax bill.
Maybe next year. I need to break the TT grip.
Helping my son with his Arizona return - straight forward - and California. Train wreck.
The forms are so so so so difficult.
It would lead to less attending college - and given the cancelling of loan repayment plans, Fulbright and more may be their point.
They seem to want to dumb down society.
I know. I was thinking this started as talking about what if it changes to all being taxable. But I should go back to the beginning and re-read. I might be mixing up threads and causing confusion. Not what I intend to do.
Edit: I was mixing up threads, so deleted that response. Sorry for adding confusion!
Thanks
Odd TT saying otherwise.
I’ll do a return for my daughter. Based on what you are saying she’ll owe nothing.
The best thing to do is to read the IRS links that cover the topic: Topic no. 421, Scholarships, fellowship grants, and other grants | Internal Revenue Service. I used Publication 970 to figure out what to do. This might also be helpful: Do I include my scholarship, fellowship, or education grant as income on my tax return? | Internal Revenue Service.
That’s why I use turbo tax - so as not to think !!
I use it, too, but I recall having to go off script when it came to 1098T and excess scholarship stuff.
I think I posted that the 1098T doesn’t have all the info and parents need to keep their own good records. His kid’s tuition at another school isn’t on it, and neither are books, or things like replacing a computer…all allowable expenses.
Got a 1098-T from Nebraska but not the Korean school. Not gonna let it bother me. We paid both for her summer program.
Only one more year of this !!! Well half year !!
To others reading this thread. You need to keep track of your own expenses and what they are for. The 1098t doesn’t even include things like books or a replacement computer, or (as noted) tuition at a different college.
Keep your own records.
Yes but turbo tax is only asking about 1098-T.
I have all those records but nowhere to put them on the schools without the 1098-T.
Nebraska is all tuition. No merit.
Perhaps if I just went to an accountant…
You are asked for the amounts…and it doesn’t need to be what is on the 1098 T.
@kelsmom am I correct about that?
Maybe on tax forms but you are only asked for expenses if you have a 1098-T on turbo tax.
It could be turbo tax is wrong.
When TN had state income tax, it was wrong so I did by havd. As kelsmom saud, with the college expense she had to pivot when using TT.
Thanks all. I got mine fixed. No idea about my daughter. Wasn’t going to do a return this year but with cd income, stock income and scholarships, I guess I’ll need to.
Note that one way for dependents with earned income to avoid kiddie tax, if it would otherwise be due, is to contribute to a deductible IRA. That’s what we did one year, then converted it to a Roth after graduation when my D’s marginal rate was much lower.
Thx. If she owes I’ll look at that but I don’t think she will as she had no income (a bit but no w2), maybe 1k in interest from CDs, and I think the summer school wipes out the $5k scholar thing.
With a std deduction she’ll be well under.
Not even sure if I should file but it makes sense to.
This year assuming her job doesn’t get Trumped, she’ll have income.
Thx all.