My son will claim his daughter as a dependent on his taxes. What is the best way for him and her to file their taxes?

[gdjones]

My granddaughter has $4,004.90 payments on line 1 of 1098-T. She also has $1,675.00 on line 5 of 1098-T. Her wages, tips and other compensation on her W-2 line 1 is $14,898.00.  Her father will be claiming her as a dependent and he paid for her tuition.  What is the best way to file his and her taxes?

[DaveF1006]

He should his return:

• To claim his daughter as a dependent
• To claim the Educational Credit by entering all the information on the 1098 T.

In turn, your granddaughter will file her own return to:

• To just report her W‑2 INFORMATION.
• She will not enter 1098‑T to claim the educational credit. 
• When she records her information in the PERSONAL INFO section of her return, there is a checkbox she is to check indicating  “Someone else can claim me as a dependent”.

[Hal_Al]

Since she is his dependent, only he can claim the tuition credit.  He enters the 1098-T on his tax return. In addition to tuition & fees, books and a computer are qualified expenses for the tuition credit. 

It takes $4000 of qualified expenses to get the maximum credit.  $1,675.00 (paid by scholarship) of the $4005 in box 1 of the 1098-T doesn't count (see # 4 at the link below for an option). 

She does not have enough income to be required to file a tax return (less than $15,750).  She is allowed to file if she needs to get back income tax withholding. She cannot get back social security or Medicare tax withholding. In TurboTax, she indicates that somebody else can claim her as a dependent, at the personal information section.  

Here's a post on the five main points on the  1098-T:

https://ttlc.intuit.com/community/college-education/discussion/re-what-do-i-do-with-form-1098t/01/37...