@Hal_Al
My daughter is a first year college student. We received a 1098-T from the college. This form shows that the scholarship amount exceeds the tuition amount. Even though we had to take out loans and pay out of pocket to cover all the expenses. Through research I found that the cost of Room & Board is not a qualified expense, so it's producing taxable income. My daughter did work throughout the year and is just above the standard deduction, so this taxable scholarship makes it even higher, so she has to file.
Box 1- 14406 Box 5- 16623
On top of those scholarships the loans & payments equal $3747. There is another $600 in books & other stuff that qualify. Because the room & board is $5895, its saying that she owes tax on the difference in Box 5 to Box 1. I claim her on my taxes as a dependent, when I enter the 1098 T exactly as shown, she owes a small amount for federal tax and it does not help me at all for the Education Credits.
Here's my questions- TurboTax gives me a prompt asking how much of the scholarship money was used for Room & Board. When I enter the full $5895 that the college charges, it qualifies me for the Education Credit. It then gives me a prompt that she has to claim that amount on her tax return, which increases her tax bill owed. Her tax bill owed is much less than the credit I receive, so the offset of it would be beneficial in the overall.
Am I calculating this correctly? Can I claim that full room and board cost and qualify for the credit?
This is her first year, so it's only one semester on cost. I'm thinking next year will be even more as she will have 2 academic semesters to account for, so I'm trying to figure out the best way to work around this room and board non-qualified expense (which I find absolutely ridiculous!)
Thanks for your help!
