I have been reading some posts relevant to my question, but I'm still confused. I'd greatly appreciate your help on this. Let me describe my situation:
- My daughter is 21 years old and a full-time college student
- She received a scholarship that covers more than the tuition:
- Scholarship amount: $46,000
- Tuition & fees: $19,000
- Thus, she has excess money: $27,000
- She also made $20,000 from her internship
- We received $2,200 from her 529 plan. The 1099-T was sent to me (my daughter is the beneficiary)
- In sum, her income last year was $49,200 ($27,000+$20,000 + $2,200)
- I see that excess money from the scholarship ($27,000) is taxable
Now, here are my questions:
- Since I didn't pay any money for her college, do I even need to enter 1098-T on my return? Or should we both have to enter the 1098-T since she's my dependent?
- I read from some posts that I may be able to "split" the scholarship excess. Is it true? If yes, would this work?
- Both my daughter and I enter the 1098-T. BUT we enter different amounts
- My daughter enters $0 for Box 1 and $46,000 for Box 5. She'll end up paying tax on $46,000
- I enter $19,000 for Box 1 and $0 for Box 5
- Is this a correct way to split it? Is it legal to do this? Will this help lower the tax that we owe?
- Who should report 1099-T? It's sent to me, but the beneficiary is my daughter.
- Do I even claim her as my dependent when the scholarship and her income covered her housing and other living expenses?
Thanks for your help!
