I am preparing my son's 2020 return. He is not a dependent, and files single. He received a 1098-T and box 1 shows $15,503.28, but the actual amount for qualified tuition is $13,838.95. Box 5 shows $15,315.65, which is correct.
He received the following amounts to pay for his educations expenses: Loans $7,176.00; Scholarships $9,683.65, and Grants $5,632.00, for a total of $22,491.65. He received a refund of $8,652.70 ($22,491.65 - 13,838.95).
Per the instructions for Form 8863, it is my understanding that we can choose which funds to apply toward his Qualified Education Expenses and which funds to apply toward other expenses (i.e. room and board).
If we choose to apply the $9,683.65 in scholarships toward his Qualified Education Expenses of $13,838.95, and assume a portion of his loans cover the remainder of these expenses, I believe that will make his Adjusted Qualified Education Expenses $4,155.30 ($13,838.95 - 9,683.65), which will be reported on Line 27 of Form 8863 (limited to $4,000). Is this correct?
The remainder of his loans and his grants will be considered applied to room and board. Of this, the grant amount of $5,632.00 would be included in income. Is this correct?
Assuming the above questions are correct, how do I report this information in Turbo Tax so that it is displayed properly on his tax return?
Thank you for your help!!
