Useful info for 1098-T

mcat2
Tue, 29 Mar 2016 00:28:57 +0000

Is the scholarship/grant smaller than the qualified education expenses (roughly speaking, tuitions + fees, but excluding room and boards; however, it includes some other expenses that are required for every student in her major)? If yes, the answer to your question is no.

But this does not mean that this is the MOST economical way for you to do iso. (Reason: Your D’s marginal tax rate is lower than yours.)
In this paragraph, I assume that the size of her scholarship/grant is larger than the size of the qualified education expenses (so some of her scholarship should be considered as taxable income – either as your D’s taxable income or your taxable income, depending on whose tax return declares her as the exempt — I think.)

The understanding of all these will be helpful if/when you want to dispurse money from your 529 plan, and also want to take advantage of education credits (or deductions.)

The gist of the scholarship (in the context of treating it as taxable income or not) is that the portion of the scholarship OVER/ABOVE the qualified education expenses is considered as taxable income.

I could be wrong here by citing this number: Your D will not need to file her tax return unless her income is larger than 10300 (which is the exemption plus the standard deduction), I think.