I've been scouring the TT Community for help and see a lot of related responses, but I'm still confused with all the info. I filed an extension for 2022 due to my confusion as it relates to my daughter's college expenses, scholarships and her QTP. And and I am thinking I might need to amend 2021 while preparing to file for 2022.
In Fall 2021, my daughter was a college freshman. She received $8000 in scholarships - $3500 from the university, $2000 from local groups that was sent directly to the university and $2500 from local groups that was given directly to her. She also received $2721 in a FAFSA loan (half the amount awarded) and has a QTP that we paid for. In addition, she worked in the summer of 2021, making $2272.
Here's what I did on my 2021 taxes:
My husband and I claimed her as a dependent on our taxes.
We entered her 1098-T and 1099-Q info on our taxes and claimed her education expenses (**at the time, only books and supplies of $99).
Box 1 of 1098-T = $11731
Box 5 of 1098-T = $5500
Box 7 "...includes amounts for an academic period beginning Jan-Mar 2022" = it was checked
Other scholarships not included = $2500 in local scholarships given directly to my daughter (not included on parents original 2021 tax filing)
Box 1 of 1099-Q = $5433
Box 2 of 1099-Q = $1608
Box 3 of 1099-Q = $3825
We (parents) qualified for the AOTC and received $2436.
We did NOT file a tax return for her because, based on what I had read and thought I understood at the time, she didn't need to file a return because she made less than the standard deduction.
As I started to file my 2022 taxes, I stopped because as I researched more, I felt like I hadn't done the 2021 taxes correctly as it relates to all her college stuff. I decided I might need to file a 2021 return for her after all, which might mean an amendment to mine.
1) If I go back and file a 2021 tax return for my daughter, where do I include the $2500 in local scholarships given directly to her?
@Hal_Al - I read in one of your other posts that it would be considered as earned income for her standard deduction and unearned income for the "kiddie tax", but I still wasn't certain where to enter it in TT.
Do I include under Wage & Income/Less Common Income/Miscellaneous Income? And then do I also include it under Deductions & Credits/Education/Expenses & Scholarships/Scholarships & Grants/Other Scholarships & Grants?
OR...do I include all or part of it on my taxes?
**NOTE - I realized that I should have included Room & Board expense of $5013 with the education expenses on my taxes for 2021 but was confused thinking that expense was part of the total payments/financial aid received by the university (in Box 1 of 1098-T) and it looked like I was "double dipping". Now I know it wasn't included.
2) My other concern is that on the 1098-T for 2021, the payments received in Box 1 included funds from the QTP for the Spring 2022 classes. Box 7 was checked, and luckily I have the breakdown of exactly was paid for Spring ($5248). I just want to make sure how to handle this.
Should I enter that amount for Spring under Deductions & Credits/Scholarships & Grants/Did Your Aid Include Amounts Not Awarded for 2021 Expenses? Do I enter it on just my daughter's tax return or on mine too?
Thank you so much for your time!
