1098-T Education

[Chung11358]

My daughter received 1098-T second years in college.. Box 1 $9390. Box 4 adjust prior year $2535 ,Box 5 scholarships $9796. and box 6 $2535 scholarships prior year.

My question how I enter into turbotax . Turbotax tell me, my daughter has to pay income for $9796.00 I don't know what is wrong why she had to pay those scholarships for the income. 

Please advice

Thanks

[Hal_Al]

Go through the entire education interview until you reach a screen titled "Your Education Expenses Summary".  Click edit next to the student's name. That should take you to a screen “Here’s your Education Summary”. Click edit next to “Education Information”. When you get to the screen titled “Amount Used to Calculate Education Deduction or Credit”, verify the amount you want to use or change it.  For undergrads, you use $4000, to claim the tuition credit. You may reach that screen sooner.

Based on your numbers, about $4406 of her scholarship will be taxable, unless you have additional expenses like books and a required computer.  If her scholarship is "restricted" to only being used for tuition, you may not be able to "shift" tuition $ from scholarship to the tuition credit. 

[Chung11358]

Hi, how do apply $4406 of my daughter scholarship into my income taxes on turbotax without any document .

My daughter is second years in University school. 

[Hal_Al · Accepted solution]

If any of your daughter's scholarship is taxable, it goes on her tax return, not yours, even if she is your dependent.

If that $4406 is her only income, she is not required to file a tax return.

You do not report his/her income on your return. If it has to be reported, at all, it goes on his own return. If your dependent child is under age 19 (or under 24 if a full time student), he or she must file a tax return for 2022 if he had any of the following:

1.          Total income (wages, salaries, taxable scholarship etc.) of more than $12,950 (2022).
2.          Unearned income (interest, dividends, capital gains, unemployment, taxable portion of 529 distribution) of more than $1150 (2022)
3.          Unearned income over $400 (2022) and gross income of more than $1150 (2022)
4.          Household employee income (e.g. baby sitting, lawn mowing) over $2300 ($12,950 if under age 18)
5.          Other self employment income over $432, including money on a form 1099-NEC

Even if he had less, he is allowed to file if he needs to get back income tax withholding. He cannot get back social security or Medicare tax withholding.

In TurboTax, he indicates that somebody else can claim him as a dependent, at the personal information section.

The simplest way for her to enter that, in TurboTax, is enter a 1098-T with box 1 blank and $4406 in box 5, since you have already calculated the taxable amount.  The 1098-T that you enter, in TT, is not sent to the IRS. It is just a data entry short cut. 

[Chung11358]

I am on the "education information" go through entire education interview but I don't see the screen “Amount Used to Calculate Education Deduction or Credit”, 

[Hal_Al]

It depends on which option  you used to enter it on her return. If you used the short cut (enter $4406 in box 5 and 0 in box1), you may not get the screen “Amount Used to Calculate Education Deduction or Credit”.

The outcome you want is for $4406 to appear on line 8r of Schedule 1.