Q1. I made these changes in our TT but I didn’t change any of the other input screens that followed meaning I still have that $1k was paid for textbooks and $20k was paid for the room and board. Is this correct?
A1. No. You should have entered no other numbers. Although on your tax return, it will make no difference. You still get the $2500 credit.
Q2. Line 17 Used for Credit on our worksheet shows 0. Is this correct?
A2. I don't think it matters when using the short cut, as long as you are getting the $2500 credit. You talk about "your refund not changing". Verify that you're getting $1000 on line 29 of form 1040 and $1500 on line 20.*
Q2a. What is the purpose of this number anyways?
A2a, It's TT allocating money for the calculations. So, yes it's usually $4000. But, it isn't always needed.
Q3. I want to make sure that I am NOT double-dipping for the $1k for the textbooks since it is in two places.
A 3. Yes, one place or the other, but not both. Telling you to use $33K, assumed no other entries would be made. You want TT to end up with $33K on line 8r of Schedule 1.
Q4. Line 17 Used for Credit on my Son’s worksheet, is blank (doesn’t even show a 0). Is this correct?
A4. Yes. $0 was entered in box 1. There is no tuition to allocate to the credit or the scholarship.
Q4a. The first time I had entered the 1098T information for him a few weeks ago, I had seen an input screen for “Education Expenses Used for a Tax Credit” which said “…if the person who claimed you as a dependent also claimed AOTC for these expenses, then you need to enter $4,000 in the box below in order to calculate education credit.” However, this screen doesn’t show up in his TT, so I cannot enter the $4k in the box. I hope TT is calculating it correctly.
A4a. That's if you do it the long way and let TT crunch all the numbers. Using the one number entry short cut avoids all that. TT is doing it correctly, if it enters $33K on line 8r, of schedule 1.
Q5. Do we need to attach a statement to our tax returns (at least my Son’s return), to clarify why there is additional scholarship income on his Sch 1 that is in excess of what is shown on Form 1098T?
A5. No. This is a very common situation. The IRS does not try to match box 5 numbers.
*Line 20 may include other credits, if it's more than $1500, look at line 3 on schedule 3.
