We have never claim the AOTC due to all qualified expenses being covered by the scholarships. He received 1098t in 2023 where box 1 was $59,992 and box 5 was $71,669. Box 7 was checked. He had no other income and I was told he did not need to file 2023 taxes because it was under the standard deduction. Note to add some of the scholarship was used for Maymester that he attended overseas earning some credits through his school which furthermore complicated things.
2024 1098t box 1 is $7600, box 5 is $34,197 and earned $6k in w-2 wages. Although box 1 shows the amount for the summer tuition, it was not paid by scholarships in box 5. He still
has an open balance owed to the school for over $5k and appears more than likely a hefty tax bill due to how the school reports and bills tuition and scholarships received. I agree he should probably pay taxes on the amount refunded ($6k), but my mind is not grasping how over $27k is considered taxable income for 2024.
Can you attempt to “dumb” it down for me?
