Thanks much for the clarification. Relieved to know Turbotax is working on more clarity for future releases! I already deleted everything but now I am curious as to how it really calculates--long day at work and not sure when/whether I'll have time to get back to this and try it out to see what happens, but if I do, good to know where to look for what figures Turbotax is using. I'm still dubious that it could calculate any of this correctly with the information that it asked for, though. Since you offered, will provide the info you requested and would be curious to see if you still think Turbotax can figure this correctly.
I am the parent
Student is a my dependent (although they weren't last year as they took gap year from college)
Box 1 of 1098-T is $34472
Box 5 of 1098-T is $25250
No other scholarships
Box 5 does not include 529 plan disbursements
Scholarship in box 5 came directly from the school to cover tuition
Box 1 of 1099-Q is $18656
Box 2 of 1099-Q is $6308
Recipient on 1099-Q is the student
Room and board paid to school was $7790 (The 529 disbursement was sent directly to the school to cover the bills from the school, including tuition and room and board)
Other qualified expenses--basically none that I can tally (I could only find receipts for $44 in books; school meal plan is minimal only $400 per semester because they just have a cafe and students do most of their own shopping and cooking, but I did not try to include any additional food costs)
Student earned about $12,000 taxable income in summer job
Student is a full-time undergraduate in first full-year of college (although expects to graduate in 3 years because they transferred in a lot of credits from high school/community college, etc.)
So my concern is that every cent that was billed by the college was paid for through a 529 disbursement. That includes room and board which qualifies for 529 distribution but not for the AOTC. So I don't see how I can have any qualified expenses left for which to claim the AOTC. And if I just say well I'm paying the tax on the 529 disbursements so I don't double-dip, I still don't understand how that can really work because we did in fact use those funds to pay the educational costs. But if I don't claim the AOTC, is the student going to end up with a tax burden from the 1099-Q somehow? It's all so confusing! We usually use the FreeTax for student's tax reporting but does Turbotax share info between returns somehow if we complete the students using Turbotax as well? (The charge for state returns is a lot higher using Turbotax.) Thanks for your help!
