- Mark as New
- Bookmark
- Subscribe
- Subscribe to RSS Feed
- Permalink
- Report Inappropriate Content
Education
Q.> Will doing this step end up making it to where our daughter would have to pay taxes on the amounts listed on the 1098 on her return?
A.> Simple answer no. But it's complicated. She already has to report scholarship income, because her scholarship amount is so large. A little more at 10% is miniscule, since you're getting a 100% credit. As it turns out, if that is her only income, none will be taxable, since it's under $12,400
Q.> Do I have to do the loophole mentioned right after this step to make this work?
A.> No. The loop hole is instead of , not in addition to. Instead of entering $1750, you enter $4000.
Entering $4000 will cause her a little tax at 10%. After $2000, you go from 100% to 25%. That is, the first $2000 of expense is a 100% credit for you. The 2nd $2000 is on 25%