Education is confusing ...where to put Pell Grant? Optimizer?
I've used Turbotax for years. I think I've used it in both online and DVD formats.
This year I've encountered a couple aspects that were baffling. I've enjoyed using TT in the past because I was never left with any question about how to proceed or how something was being treated. This year is different. Since taxes have always been so easy I've put them off til Tax Day but I'm sad that I now have questions that end up being urgent.
Last year our son was in his 2nd year of college. I don't recall anything unusual when doing taxes last year. This year something called an "optimizer" slider-window popped up within TT that seemed to relate to credits called "American Opportunity" and "Lifetime." I hadn't heard of either. There were 2 buttons to select for this "optimizer" -- I selected both. It said to "let it run." I saw a bunch of empty boxes. A number was pre-entered in a tuition box but the "Am Op" and "Life" boxes were empty. I entered nothing because there were no instructions. ...Am I supposed to do anything? I went back thru the Education part and it looks like we qualify for the "Am Op" credit of $2500. It seems to have appeared by itself. Has it likely also been entered and applied? I've tried to find this optimzer slider-window again but haven't been able to. Where did it go? Where does it live?
I also have seen in two areas, I think, a box for "Other tax-free assistance." There is no explanation of what this is. So I don't know if I should enter anything into it. Our son got a small scholarship and also a full Pell Grant -- should these be entered somewhere? It was never deposited in our bank account.
We also have a 1099-Q for a Education Savings Program. I've entered the data and it appears as Misc Income. It's a smallish amount of money, but I thought it was to be tax-free since it was used for college tuition. Is it somehow "counted but not counted"? How can I tell if it's being taxed or not???
Are college expenses all basically being considered against our Standard Deduction? I think our SD is larger than all our misc expenses added up so maybe I shouldn't worry about it?
PS: I found one other confusing part of TT this year. My wife and I are self-emp and our incomes vary a lot. Last year I didn't know if we'd need to pay Quarterly taxes but now I know that we should have since we did pay some tax last year and it looks like that's how Quarterly is estimated. I encountered a section in TT that asked for data to be put into a box labeled "2210." I'm not sure what that is or what kind of number should be entered. It appears to be a penalty for not paying Quarterly. But TT provided no info for that section. This was very alarming to me. TT has always been so clear in the past.