Sometimes the program will initially allocate 10,000 towards
a credit if there is no income yet entered, or if the 1098-T is entered before the 1099-Q.
Please go back to the "Education" section.
(Federal, Deductions & Credits, Scroll down to Education).
Get to the "Education Information" section (the
last option on the "Here's Your Education Summary" screen.
Re-answer the interview questions until you get to the last
screen. This screen should show how much of the education expenses are being
allocated to a credit.
If you are eligible for the American Opportunity Tax Credit
(usually the more valuable credit), the credit maxes out at 4,000 expenses, so
you wouldn't want to allocate more than that.
If you are taking the Lifetime Learner's Credit, the credit
maxes out with 10,000 expenses.
If you want all the expenses to be applied to the
scholarships/grants/1099-Q distribution, change the amount to 0.
Type letme into the search box to
see which credits you are eligible for and change the credit you claim if
desired.
Once you click "Maximize My Education Tax Break"
the program determines the best allocation, so don't click this if you want
something different.
You can always go back to this allocation screen and change
the allocation amount.
