Taxable scholarship not reported on W2 and standard deduction issue

[keremoner]

I claim my 21 year old full-time college student daughter as a dependent. She has had 2 scholarships that have a total of $9,200 in taxable portions (that were spent on room and board). She is filing her own taxes as she also has an insignificant amount of self-employment tax ($400).  She reported the taxable portion under misc. income and TT shows her as owing over $2,000 in federal and state income taxes. She entered the exact same info on H&R Block, Credit Karma, and FreeTaxUSA and ALL show her as owing $0 because they all give her 9,200+350 in standard deduction. What is she doing wrong? Thank you kindly for answers.

[SusanY1 · Accepted solution]

It sounds like the scholarships are somehow being included with her other self-employment income rather and taxed as such, rather than being classified as taxable scholarships. 

Please have her remove the income from "other income" and then go to Deductions & Credits and then Education.  Under Education she should select "Expenses and Scholarhips" and follow the prompts.  She should not enter the expenses here (just click through most of those initial screens) and near the end she will have the option to enter scholarships. 

This will tell the program to treat them properly and they will show on the tax return as "other income" with the designation SCH beside it when printed for review. 

[keremoner]

Thank you for your answers. She is not reporting any expenses. She attends Pitt. She received a critical language scholarship from an outside agency in the amount of 15,000. $5,000 of it was designated as living expenses and the rest went directly towards her tuition. Then she received Boren scholarship through the State Department and 4,200 of it was designated as living expenses with the rest being program tuition overseas. All she wants to do is to report the total of $9,200 in taxable scholarships. All other software seems to have a category under misc. income that is specifically for 'taxable scholarships'. I think TT needs to make their simpler as well.  Thank you for your help.

[SusanY1]

Thank you for that suggestion - I will forward it on to the folks who work on that area of the program!  I agree that it would be nice to just skip right to that section when necessary. 

Currently, the only way that we have to report it is to skip through those expense screens until you get to the one that allows a similar entry of just the taxable portion of the scholarship income.