1. You are correct to claim $4000 n box 1 on your return.
2. Your son will have $20804 minus $7,116 tuition minus $409 books in his box 5 and zero for tuition.
3. Box 1 $4k and box 5 zero
4. The goal is to get the right answers on your tax return. The program is not part of your return. Which is why you can enter weird numbers, and make wrong choices -only the final answer on the tax return goes to the IRS. To enter, see Video: Guide to IRS Form 1098-T Tuition Statement
5. The money he earned that he spent however he wanted will go on his tax return. It isn't related to school tuition.
6. If he meets the requirements to be claimed as a dependent, yes. Otherwise, you don't get the tax credit. Take this quick quiz, Whom May I Claim as a Dependent? and IRS Worksheet for Determining Support. You may be paying for health insurance, trips home, providing a permanent home, vacations, clothes, etc. Many college kids are still supported by their parents,
7. No, either you claim him or he does.
The IRS has a great brochure that explains how scholarships and tax credits interact.
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