All Posts

Regarding the accounting, here is a hypothetical situation and I'd like someone to check the logic: College costs for dependent student: ---------------------- Tuition: $10,000; Qualified Education costs (would be in Box 1 of 1098-T)  Mandatory Fees: $5,000; Qualified Education costs (would be in Box 1 of 1098-T)  Housing and Food: $15,000; Unqualified education costs (would not be in Box 1 of 1098-T) -------------------- Total: $30,000 -------------------- Unrestricted Scholarship (can be used for any of above): $5,000 Accounting wise, the school lumps expenses and payments, including the scholarship in one general account, but will report the scholarship in Box 5 of the 1098-T   I have checked online, and it says as long as a person makes the payment directly to the school, the tuition is never considered a gift, it also says that a parent has leeway in terms of how the unrestricted scholarship is allocated when performing tax calculations regardless of how the school actually did it.   So, to avoid any need to fill out a 709 I assume that the scholarship is applied to Fees first, then Tuition, such that: Tuition: $10,000 - not a gift, not reportable as gift Fees: $5,000 - $5,000 scholarship = $0 - therefore no money to report  Housing and Food: $15,000 - while this is considered as support when used on a dependent and not a gift, if it was considered a gift, it is below the $19,000 gift threshold so no 709 needs to be filed   Is this good math?  I did research and asked several AI's and I am told this is completely legitimate way to approach the problem.  I also had several AI's say that since the housing and food is considered support when the college student is my dependent, the IRS wouldn't expect it to be reported as a gift even if it was over $19,000   I believe that most parents and advisors say that paying for housing and food for an adult dependent at college is not considered a gift and I have made a list of relatively recent references.   Gifts, Loans, Taxes and Your Adult Children You can spend any amount on a dependent without the money being counted as a gift, so the gift tax rules will be irrelevant if your child is considered your dependent, regardless of how old he or she is.  Gift Tax Implications: Supporting Adult Children in 2025 If your adult child is your dependent, financial support is not considered a taxable gift. How to Pay for College for a Grandchild or Someone Else - What exactly are we talking about on paying for college? Do I have to worry about taxes when paying for college for my child? Michael Barker: Jean, that’s a great question and a good place to start, because paying for your own child to go to college is fairly easy from a tax perspective. Because parents are deemed to have an obligation of support for their children, so, most payments for college expenses would not constitute gifts for gift tax purposes. 

Could you please confirm that you purchased the correct version of TurboTax—the desktop edition, not the online edition? In most cases, error 606 occurs when you enter a TurboTax Online code for a Desktop version, or vice versa.    Thank you for choosing TurboTax.  

you didn't take depreciation on the property. the IRS treats this as the adoption of an incorrect method of accounting, which may only be corrected by filing Form 3115, not amending prior years.  This allows you to catch up on all the depreciation you missed without having to amend your previous returns. It's considered an automatic change, so the IRS generally grants these requests without much scrutiny. The form lets you take what's called a "Section 481(a) adjustment" that essentially gives you all the depreciation deductions you missed in one lump sum on your next return. The best part is you don't have to file amended returns for each year, which saves a lot of hassle. 

@frodo2 wrote: Thanks mesquitebean. I love a down field punt of the problem 😉 You're welcome.  Continuing the football analogy, there was a little yardage gained, but not enough for a first down and certainly not within distance of a field goal.  So a punt was the most likely choice.  😉   At least it's now known you're using a Mac and that you say your *.tax2024 file is not password protected/encrypted.  The OP didn't mention his platform either, but if I had to guess, it's probably Mac, too.   Hopefully, someone familiar with the Mac platform may have a suggestion in the thread, but if not, the folks at TurboTax Support can converse with you in realtime in a logistically easier back-and-forth.

@frodo2 wrote: 2024 desktop. Mac (OS 15.7.1). *.tax2024 not encrypted protected. If it's not a password/encryption problem, then unless a Mac user sees this and responds with a suggestion, here's how you can phone TurboTax Support during business hours and ask for someone familiar with Mac computers:   FAQ: What is the TurboTax phone number? https://ttlc.intuit.com/community/using-turbotax/help/what-is-the-turbotax-phone-number/00/25632

@ clcgardner and @ frodo2  Did you use 2024 desktop software and are trying to transfer into Online TurboTax?  Is your *.tax2024 data file password-protected (Windows) or encrypted (Mac)?   If so, you have to use the 2024 software and remove password protection from the file and in Mac, remove encryption.

CS101, maybe CS201 - test before ship. Exactly why I don't trust 'online' filing offerings. If a software shop can't get even get the basics right, shiver me timbers what lurks lobbing ones tax filings on the cloud (retired network security engineer).

You cannot change the tax year.   The current online program is for 2025 only.   Only a 2025 return can be prepared online and only a 2025 return can be e-filed.   Online preparation and e-filing for 2022, 2023, and  2024 is permanently closed. Note:  The desktop software you need to prepare the prior year return must be installed/downloaded to a full PC or Mac.  It cannot be used on a mobile device.   To file a return for a prior tax year  If you need to prepare a return for 2022, 2023, or 2024  you can purchase and download desktop software to do it, then print, sign,  and mail the return(s) https://turbotax.intuit.com/personal-taxes/past-years-products/ You may also want to explore purchasing the software from various retailers such as Amazon, Costco, Best Buy, Walmart, Sam’s, etc.   Remember to prepare your state return as well—if you live in a state that has a state income tax.   https://ttlc.intuit.com/turbotax-support/en-us/help-article/state-taxes/contact-state-department-revenue/L9qVToi02_US_en_US?uid=m6e06um0   When you mail a tax return, you need to attach any documents showing tax withheld, such as your W-2’s or any 1099’s.  Use a mailing service that will track it, such as certified mail so you will know the IRS/state received the return.   Federal and state returns must be in separate envelopes and they are mailed to different addresses.  Read the mailing instructions that print with your tax return carefully so you mail them to the right addresses.