@NCperson @Hal_Al Thanks for the detailed responses. With your suggestions, the following is what I am planning do with couple of follow up questions 🙂
1) Will claim him as dependent so that I could get $500 credit. I assume it does not have any income limits.
2) Also ask my son to file his taxes and check the box which says someone else could claim him as a dependant.
Regarding this: "A special tax rule allows the education credit to go to whoever claims it, regardless of who actually paid it. The student can claim the credit even if his parents paid the tuition. Different rules apply to tuition paid by scholarship. "
- I thought I will not be able to claim education credit as its based on my income. If my son claims it and he has no tax liability based on ~8K income, does he get any credit? Approximately 3rd of his Free is covered by the merit scholarship he got from the University.
Regarding "Yes, put the maximum amount allowed in a Roth IRA ($7000 for 2024). His IRA contribution is further limited to his compensation (earned income)."
- He cannot probably put much of it in Roth IRA then? Is there a formule based on earning income how much he can put in Roth IRA?
