1. Yes. You can choose not to claim a dependent. However, if you did in fact provide over half their support, they must mark that they could be claimed as a dependent.
2. It depends. A dependent's deduction is earned income +$450 up to the standard deduction. Therefore, the amount of earned income will determine the deduction. If her earns more than the standard deduction, he will receive the standard deduction.
3. The nonrefundable portion of the education credit is up to $1,500. It is the portion that reduces your tax bill.
4. No, the 529 used for tuition payment will not affect either return. If the 529 disbursed funds beyond tuition and room and board, then there would be a taxable event.
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