I started college last fall, I am a full time student, 18 years old, at least one parent alive. Therefore I might be subject to the kiddie tax if my income is less than half my support. Do I have to include the cost of tuition when calculating my support if I received a scholarship to cover the cost of tuition?
I know the IRS says that scholarships can't be counted as me supporting myself, but is the cost of tuition part of my support? I wasn't billed tuition by the school, but the school did issue me a 1098-T with what appears to be the in-state tuition rate on it. So in a way, nobody paid my tuition (the school probably wrote it off?) and school was just inherently free to me, but tax documents show that I got a scholarship for school...? I didn't receive any money in my bank account that I used to pay the school; one department paid another department (or at least that's what it seems like) for me to attend.
If I do need to count the tuition amount in my support, is it the in-state or the out-of-state rate that is part of my support? The 1098-T appears to show the in-state rate (because of my scholarship, the school probably gave me a waiver of my out-of-state status?) but I am actually out-of-state.
Furthermore, I have self employment income, and as such I could deduct less business expenses to keep my earned income greater than 50% of my support (if I count one semester of in-state tuition as part of my support). Can I do this? Do I have to deduct business expenses if it's favorable to me to not deduct them?
Thanks!
