What tax issues should I prepare for?

mommdc
Sat, 31 Mar 2018 15:30:33 +0000

Any scholarships or grants received in the tax year (not school year), can be offset with tuition, fees, book expenses (QEE=qualified education expenses) paid during the same year.

Anything over that is taxable income to the student.

If parents file married filing jointly and have MAGI of up to $180,000 (I think), they might be able to claim an American Opportunity Tax Credit of up to $2,500 a year for four years of undergraduate education.

https://www.irs.gov/credits-deductions/individuals/aotc

If some expenses are paid with 529 funds, the same expenses can’t be claimed for AOTC.

QEE for AOTC is tuition, fees, books.