Thank you!
Here is the process:
1. I put 1098-T into my tax return, where daughter is claimed dependent.
2. Turbotax knows about all numbers in the 1098-T boxes by itself based on the college license.
3. After step 2 it asked me about how much was spent on the books and materials, it asked me to qualify how much of that amount is required to be spent in the college student store, and how much was spent on materials and devices bought outside.
4. In the next step TURBOTAX by itself WARNED daughter to have her personal dependent tax return prepared, and showed the exact amount of money she has to put in education part of the deductions division. It is not my will, I of course can put tripled amount, but it is not required by the program and I assume by the IRS.
5. I finished preparation of my own TAX return.
6. I then started new return for my daughter, at this moment turbotax already knew what I put in my return regarding her higher education, and come up with numbers in boxes 1 and 5 and asked me "How much of this amount (box 5) was spent on room and board?". Attention: it does not ask me about excess, it is asking me specifically about room and board. If you look at the start of our conversation, you will see what problem was the subject of my concern, without any knowledge of how turbotax is working I assumed there the way of calculating the taxable amount of the scholarship and grants, and my preliminary assessment was exactly what you are saying : box5 - box1 with some discrepancies , but it is wrong, only room and board is taxable, and this amount is less then difference between numbers in the boxes. I do not know, that is why I wanted to understand how turbotax is working on the first place and opened this topic.
7. It is not the end of adventure. Now turbotax is asking about "Child with Investment Income", and I have to go back to my state tax return (Form 540/540A/540NR, Line 19) and put the number from that line into "Your Parent's Total Taxable Income" field, and after this Total Taxes.
And basically that's all, at least for me.
In the end I still could not file because of this message: "From 1040:Individual Form 8615 Tax for certain Children will be available only on 02/20/2020".
And all this is only because my daughter had income in the amount of the part of the scholarship spent only on room and board, and it is $10,000 in my example. I am not sure in the "Child investment income", I never seen it before.
Still I am not confident that everything is correct, I do not understand why it is more complicated then the rocket science. 🙂
Thanks again! This is my first experience, so I am sorry to keep posting.
