Hi
@shawnandellie I assume box 5 is more than box 1 on the 1098-T. Several key things to remember in your specific situation.
- If excess scholarship was awarded in 2018 (excess will exceed the actual qualified expenses paid in 2018) and it was "not" sent to the student in the form of a check from the school, make sure you indicate that it was or will be "applied to next year". Otherwise, the student will end up paying taxes on money they did not get.
- After you enter the 1098-T on your (the parent's) tax return, follow up screens will ask you for qualified education expenses not included in box 1 of the 1098-T, as well as any scholarships and grants not included in box 5.
- While not impossible, I would be surprised if any of your out-of-pocket expenses were actually "qualified" expenses. Several things to consider on this front.
1) The only qualified education expenses are tuition, books, and lab fees. That's it with no exceptions. Though the category for lab fees is rather broad and can even include the cost of a new computer for the student, provided such purchase was required for at least one course, and that purchase was made in the same tax year (2018 in your case).
2) If there are any 529 funds that were reported to you or the student on a 1099-Q that can change your picture quite a bit. So let me know if either you or the student received a 1099-Q. I've explained it fairly well in my "1099-Q Funds" section above. But that's based on both Scholarships and 529 funds "not" covering everything.
For the most part, many can figure it out on their own. But if one over thinks it, it can drive them crazy, as well as bald.
🙂"My bill was paid 1/9/2019.
Remember, expenses are claimed in the tax year they are actually paid, and it flat out does not matter what year they pay "for". Period.
"I pay just over 12000 a semester."
For what? Certainly not for qualified expenses of tuition. But you could have paid for books maybe. But not $12K by any stretch of the imagination, of course.
"So even though I am actually paying over 50%"
That's one thing that many parents mis-understand. There is absolutely no requirement what-so-ever for the parents to provide support to their student. Not one single penny. The support requirement is on the student, and *only* the student. That requirement is:
If the student provided "MORE" than 50% of their "own" support, then the parents do not qualify to claim the student as a dependent on the parent's tax return. (This next part is important) Scholarships, grants, 529 funds, money from mom and dad, Gifts from Aunt Mary, etc) *DO* *NOT* *COUNT* for the student providing their own support.
Now there's more to that support requirement too. For example, it's perfectly possible for a student to have earned a million dollars, and yet still not have provided more than half of their own support. For example, if a student was awarded $50K in scholarships (wth excess money returned to the student), then there's just no way on this green earth that student provided more than 50% of their own support, regardless of the student's earnings during the tax year. That would mean the student's support requirements would have had to exceeded $100,000 for the entire tax year, and that's not likely even for a Harvard or Yale student.
