Q. My son had a job where he earned $836 with $17 taken out for federal income tax. He didn't receive a W-2. Do I need to track this down?
A. Oh, yes. The IRS has instructions on what to do if you receive an incorrect W-2 and the employer is uncooperative: https://www.irs.gov/faqs/irs-procedures/w-2-additional-incorrect-lost-non-receipt-omitted/w-2-additi...
Q. I put $3348 (14420-11071) at his main school.
A. That is the usual way. But there's a better way for your situation.
Q. When I had put the 1099-Q into Turbo Tax his taxes were very high. Is that normal?
A. Yes. What you withdrew duplicated expenses cover by scholarship; some of it will be taxed.
Q. Would it be better for me not to claim the $4000 AOC.
A. No. The AOC is very generous, for some people (probably including you) over 100% credit. Claim The AOC first.
Q. Should I put the scholarship and/or 1099-Q on my taxes, rather than on his taxes? My tax rate is low.
A. No. It's not optional. Taxable scholarship must go on his return. The 1099-Q must go on his return, because the 1099-Q is in his name. Next year, you can have the distribution send to you, not to him or the school. But it probably doesn't matter. He's subject to the "kiddie tax", but that just means it's taxed at your rate. not his, and both are low.
Q. I don't understand how I would report "More taxable scholarship and less taxable 529 plan distribution." How do I do that?
A. Very carefully. I still need to work out the math and will post details later. TurboTax is capable of handling it, but it's complicated. I'll provide some work arounds. Your return is simple: at the 1098-T screen enter $4000 in box 1 and leave box 5 blank. Do not enter any other numbers. His return will be complicated.
The 1098-T is only an informational document. The numbers on it are not required to be entered onto your tax return. You claim the tuition credit, or report scholarship income, based on your own financial records, not the 1098-T.
