Q1. how would I reduce income by adding additional expenses (is this room and board paid through the scholarship?)
A1. Actually, you can not add additional expense, since grad students are not eligible for the American Opportunity credit (AOC). Books, computers and other course materials are qualified expenses for the AOC, but not the LLC. Room & Board are not qualified expenses for either credit.
Q2. How can I declare more income taxable to try to get the LLC?
A2. When asked if any of the scholarship was used for room and board, answer yes. Then enter the amount you want to be taxable, in the pop up box. R&B are not "qualified educational expenses". So, this is how you tell TT that it is taxable. Note the wording at that screen “or other expenses”. You didn’t have to literally use the scholarship for R&B. This will put the taxable amount on line 8r of Schedule 1 (this line is new for 2022).
