@Hal_Al
Me again. Still having some minor problems (I think, maybe not?), but with entry issues in TurboTax. I followed your math just fine and took notes for next year so we're not having this conversation again : ) The math is understood and much appreciated. It's the TurboTax entry for my return and my son's that is killing me.
OK, on my Son's return, I deleted everything have to do with education, just leaving the Schedule C info from his DoorDash income so I was starting the education section fresh and followed your excellent instructions.
I then went to the Education section of Deductions and Credits.
Visit All
Yes to "Did you have any higher education expenses in 2022"
No to beneficiary of ESA and No to did you receive a Form 1099Q (even though he did as described above)
On Your Education Expenses Summary I entered his school name, address, etc., on that page and only entered the $10,550 on Box 5 and checked "at least half time student"
Next page NO to the Tax Free benefits page
NO to the Was any financial Aid already included in income?
YES enrolled at least half time
Yes did I receive a 1098-T from Michigan Tech in 2021 (last year), NO there was no amount in Box 2
Skipped through the following pages until I got back to Deductions & Credits main page.
Did I do that correctly? The $10,550 showed up on Schedule 1 line 8r, and summed with his Door Dash business income and carried to Form 1040 line 8, and his Federal Tax Due did not change. However, the IL state income tax, changed by $621 as the IL return picks up his FED AGI line 11 and starts with that as taxable income. Before he owed zero to the State of IL. I'm wondering if I made a mistake allocating any of this to my son at all as you did not know the circumstances of my state income tax.
On my (parent) return, I deleted the entire education section to start fresh.
Education, VISIT ALL
Did you have any higher education expenses in 2022 YES
NO to ESA, YES to Did you receive a 1099-Q
Who's Recipient on your 1099-Q, selected me parent
Next page selected Someone else not listed here for who's the student
confirm the students name entry box, LEFT EMPTY
1099-Q information- filled out all info and boxes 1,2, 3 as shown on the actual 1099-Q
IL as state sponsor
No, No to death or disability
No distribution of transfer
No refund of Education expenses
skipped through pages until "non-dependent student expenses"
entered 12889 as tuition and enrollment expenses, 9791 in the tax free assistance box
Stepped through all the "continues" and other pages that weren't pertinent to me until I got back to Your 2022 Deductions and Credits landing page
My Federal Tax Due and IL Tax did increase, so the amount was taxed.
So assuming I entered all the data correctly, should I rethink allocating anything to my son's return to avoid the IL 5% tax? But of course if I allocate it to my return, I think I'll owe a much higher tax because I'll be paying a much higher FED tax rate as we are in a very high Federal tax bracket.
Again, thanks for your time Hal_Al.
P.S. When doing all the math you showed me for calculating the assignment of QEE between parent and child, do you use the dependent child's line 9 or line 11 from his 1040 for the child's income?
