Hal_Al
Level 15

Deductions & credits

Yes, your numbers are right.  $7277 + 5567 + 54 = $12, 898 Total income.  That is less than the $14,600 filing threshold and standard deduction*, so, as you surmised, none of it will be taxed.

 

You enter the wages at the W-2 screen and the interest at the 1099-INT screen.  For the scholarship income, the simple method is to enter the 1098-T, in the educational expenses and scholarships section,  with 0 in box 1 and $7277 in box 5.** That will put all her excess scholarship as income on line 8r of Schedule 1.

 

*Technically her standard deduction is her earned income + $450, but not more than $14,600. Scholarships are a hybrid between earned and unearned income. It is earned income for purposes of the $14,600 filing requirement (2024) and the dependent standard deduction calculation (earned income + $450).  It is not earned income for the kiddie tax and other purposes (e.g. EIC).  

 

** The long way:

Enter the 1098-T, exactly as received, on the student's return. Enter book and computer expenses separately.  In the interview, you should eventually reach a screen called "Amount used to calculate education credit" (or similar wording).  Be sure the amount in that box is $4000. That will put all her excess scholarship as income on her return (line 8r of Schedule 1).

Be advised some people are saying they're not getting the "Amount used to claim the tuition credit" (or “Education Expenses used for a Tax Credit”) screen on the dependent’s interview.  That and other complications is why I recommend the short cut.