All Posts

Yes, according to the IRS: "You are a member of a reserve component of the Armed Forces of the United States if you are in the Army, Navy, Marine Corps, Air Force, or Coast Guard Reserve; the Army National Guard of the United States; the Air National Guard of the United States; or the Reserve Corps of the Public Health Service. If you qualify, complete Form 2106 and include the part of the line 10 amount attributable to the expenses for travel more than 100 miles away from home in connection with your performance of services as a member of the reserves"   Line 10 Part I includes amounts reported on Part II line 11   That is entered under Deductions & Credits Employment Expenses Job-Related Expenses    START or UPDATE  

Q. Do I file the Form 1098-T? A. Yes, in order to claim the AOC.   Q.  Does she need to file taxes with a single status with the Form 1098-T or does she even need to file the taxes at all?   With  only $4299 + $3659 = $7958 of earned income, she is not require to file a tax return.  Although you may want her to file to document the reporting of the scholarship income.    You can both use the 1098-T to enter the expenses. If you claim the tuition credit, you do need to report that you got one (the TurboTax interview will handle this) Your student should use the 1098-T because it makes entering scholarship income go smoother and puts the income in the right place on the tax forms, line 8r of Schedule 1. TurboTax can theoretically handle all that when you follow the interview carefully. But, it goes smoother if you use a work around in TurboTax (TT). Here's how I would do it. Enter the 1098-T, on your return, but only enter $4000 in box 1. No other numbers. You only enter the 1098-T to get TurboTax to check the proper box on form 8863. Lying to TurboTax to get it to do what you want does not constitute lying to the IRS. The 1098-T that you enter in TT is not sent to the IRS. Enter the 1098-T, exactly as received, on the student's return. Enter book and computer expenses separately.  In her interview, you should eventually reach a screen called "Amount used to calculate education credit" (or similar wording).  Be sure the amount in that box is $4000. You must complete the “education information” subsection to get that screen, That will put all her excess scholarship as income on her return (line 8r of Schedule 1). Be advised some people are saying they're not getting the "Amount used to claim the tuition credit" (or “Education Expenses used for a Tax Credit”) screen on the dependent’s interview.  Check the student information work sheet (part VI, line 17) to verify it was entered.  If not, the alternate workaround is  to enter $4000 less than the actual box 1  amount, when you enter the 1098-T. There's yet another (and simplest) work around. Manually calculate the taxable amount of scholarship and enter the 1098-T, on her return, with 0 in box 1 and the  taxable amount  in box 5. In that case the amount in the  "Amount used to claim the tuition  credit" box is 0 (if it comes up).    

So the short answer to your response is . . . {enter NET amount} on the Turbotax screen for the South Carolina portion.    I believe you have provided the correct answer. I contacted a SC tax account who confirmed this just yesterday. "In this case you would report the net amount of the rental.  Since SC starts with Federal taxable income, you would reduce the SC taxable income by the net IN income from the rental."            

Georgia doesn't charge traditional sales tax on car purchases,  it charges a Title Ad Valorem Tax (TAVT). You can only deduct the amount of the annual registration on your itemized deductions in your tax return. TAVT is a one-time tax. To be deductible as a personal property tax, it must be a tax on an annual basis.

The Fair Market Value would be the amount the house is expected to sell for on that date.   If you decided that 260,000 plus 65,000 was the value, then I assume you decided that 325,000 was the Fair Market Value. I don't know how you came up with those numbers, but I assume you got a market analysis or appraisal done.

 There is a tax “loop hole” available to claim an education credit, for the parents of students on scholarship. The student reports all his scholarship, up to the amount needed to claim the American Opportunity Credit (AOC), as income on his return. That way, the parents  (or himself, if he is not a dependent) can claim the tuition credit on their return. They can do this because that much tuition was no longer paid by "tax free" scholarship.  You cannot do this  if the conditions of the grant are that it be used to pay for qualified expenses. Pell grants are not restricted to qualified expenses.  I don't know about LIFE.  Using your numbers,  Student has $9333 in box 5 of the 1098-T and $8474 in box 1. At first glance he/she has $859 of taxable income and nobody can claim the American opportunity credit. But if she reports $4859 as income on her return, the parents can claim $4000 of qualified expenses on their return. Books and computers are also qualifying expenses for the AOC. So, extending the example, the student had another $1200 in expenses for those course materials, paid out of pocket. She would only need to report $3659of taxable scholarship income, instead of $4859.     Taxable Scholarships are a hybrid between earned and unearned income. It is earned income for purposes of the $15,750 filing requirement (2025) and the dependent standard deduction calculation (earned income + $450).  It is not earned income for the kiddie tax and other purposes (e.g. EIC).  For grad students and post grad fellows, scholarship, stipend and fellowship income is earned income ("compensation") for IRA contributions. Taxable scholarship goes on line 8r of Schedule 1, from which TT treats it as hybrid income.