I been watching this thread and want to add a strong word of caution.
the reason to use Turbo Tax (I think!) is that all the rules required to follow the tax rules are imbedded in the software. All you have to do is copy in the forms received and answer the questions posed honestly. That is the value TT brings and why millions purchase it and rely on it.
Having a child that goes to college within a household is just not a situation that is out of the TT norm - a lot of folks are in the same boat so the questions posed in this thread are similar to those that millions would otherwise be asking - because the situations is simply not that unusual - and inputting forms received without edits and answering questions posed in the step x step process cause you to comply with the tax laws.
So attempts to circumvent the questions or think you know more than the software is asking for trouble. Not suggesting that is occurring here but when i see statement about allocating living expenses or that there are forms missing it raises red flags for me and that the situation is being 'over thought'.
It also increases the risk of an IRS audit later because one believes they know more than the Intuit. that also will invalidate Turbo Tax's warrentee - they will pay the penalties if their software is wrong, but they won't pay if the forms are not copied as presented or the questions are not answered correctly.
for example what living expenses are you allocating and why? is that question posed by TT or are you rationalizing they can be deducted? read the IRS link below and the section I copied from that link related to expenses that do not qualify.
another red flag, "I had to add the AOTC on her form as well".... did answers to questions posed in TT cause that to occur or are you trying to circumvent the software because there is the thought that is the way to maximize the benefits?
I hope this comes across as simply advise and awareness and it doesn't offend anyone - that isn't my intent.
https://www.irs.gov/credits-deductions/individuals/qualified-ed-expenses
Expenses that Do Not Qualify
Even if you pay the following expenses to enroll or attend the school, the following are not qualified education expenses:
- Room and board
- Insurance
- Medical expenses (including student health fees)
- Transportation
- Similar personal, living or family expenses
