Education tax return last checkup
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Level 4

Education tax return last checkup

Before I send return I would like to make sure that what I have done is correct. Sorry, this question is the part of another my discussion, but nobody answered there.

Here is the explanation:

 

I might be wrong, but button "Maximize My Tax Break" is doing the same trick as playing with $4000 split between the returns.

What I did, as Kris said:

1.Put all my other income before educational 1098-T

2.Put 1098-T with all original numbers into my return.

3. Got an advise for daughter to file the tax return.

4.Put all expenses as Macbook, printer, books and e.t.c into my return in education expenses part of the interview.

5. Push "Maximize My Tax Break" button and got an education credit even though I did not pay for tuition.

 

On her return:

1.Put her W2 because it is more then $400 of earned income.

2. Put 1098_T with all original numbers.

3. DID NOT put any educational expenses on her return.

4. Put all additional scholarships not mentioned by the college in 1098-T.

5. Got the numbers for her to pay to Federal and State.

 

I did not try to put expenses on her return instead of mine because I might did not quite understand what Kris meant by saying "short cut" - did it relate to my return, or her? Correct me if I am wrong.

 

But other than this everything is pretty straightforward.

I used the excellent KrisD15 guidance:

 

1. If the student is your dependent, you enter all the forms (1098-T, 1099-Q) in your program so that TurboTax can do the math.

2. answered above

3. Yes, if you enter the 1098-T you enter ALL the expenses, books and all, room and board too.

Once you're done, your TurboTax program will issue instructions about what the student needs to claim (if anything)

The student may never need to enter the 1098-t on their return even if they need to file

4. Right, again, you enter it (the additional scholarships) so TurboTax can do the math, but if they are taxable, TurboTax will tell YOU in YOUR program that the student needs to file.

 

Also, be aware that there is a "Maxamize My Tax Break" button. If you can get more credit by having the student claim more tax, it will do that.

 

Please let me know if my interpretation of what I was advised is correct.

3 Replies
Expert Alumni

Education tax return last checkup

You do not enter the 1098-T on your daughter's return.  The 1098-T, and all other education expenses and scholarships for your daughter go on your tax return. 

 

For your daughter's return, in the Education section you want to end up with the net amount the scholarships exceed her qualified education expenses, including any amount used for room and board.  This net amount will be included on line 1 of your daughter's Form 1040 with her W-2 wages.  There will be an SCH designation with the dollar amount of taxed scholarships next to the line 1 amount.

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Employee Tax Expert

Education tax return last checkup

@StingerAlex 

 

As David says, and I tried to make clear, 

the 1098-T DOES NOT GET ENTERED a second time on the student's return. 

Enter the 1098-T in your program, then follow the directions your program tells you in regards to what the student needs to claim, if anything. 

On her return:

YES- 1.Put her W2 because it is more then $400 of earned income.

 

NO- 2. Put 1098_T with all original numbers.

Enter any income your program told you to enter for the student 

Do not enter the 1098-T in the student's tax program 

Just enter the "additional scholarship" that your program told you to enter on her tax return

 

I used the excellent KrisD15 guidance:

 

1. If the student is your dependent, you enter all the forms (1098-T, 1099-Q) in your program so that TurboTax can do the math.

2. answered above

3. Yes, if you enter the 1098-T you enter ALL the expenses, books and all, room and board too.

Once you're done, your TurboTax program will issue instructions about what the student needs to claim (if anything)

The student may never need to enter the 1098-t on their return even if they need to file

4. Right, again, you enter it (the additional scholarships) so TurboTax can do the math, but if they are taxable, TurboTax will tell YOU in YOUR program that the student needs to file.

 

 

Yes, just enter the income she needs to report as scholarship income 

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Employee Tax Expert

Education tax return last checkup

If you are claiming your daughter and her tuition is more than her scholarship, then you want to enter her 1098T and expenses on your return.

 

This gets tricky. She can claim scholarships as income and you can claim more education credit or she can claim less income and you have less credit. Use the 1098T and the other scholarships to figure this out.

 

For example: She has $20,000 in tuition, $3,000 in extra expenses and $10,000 in scholarship. 

Option 1: She could claim all $10,000 as income and you could claim all $23,000 as college expenses. She could have used her $10,000 on room and board and living.

Option 2: She claims no additional income, you claim $13,000 in educational expenses.

Option 3: some middle ground that works best for both of you.

 

If you are looking at big numbers like these, pick option 2. Otherwise, play with option 3.

 

Once you decide who gets what, add any scholarship income into her return, no 1098T. Just say scholarship income.

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