<p>Can I report less scholarship money on my taxes from the 1098 and move that to taxable income for my son?
His scholarship money pretty much equaled his tuition on the form. i want to put $2000 in to his income as a scholarship used for room and board (tacable), then use the Hope credit on the $2000 left. The scholarships he got weren't based on just tuition, they could be used for room and board.
Also, we are kind of getting screwed, the college included a bunch of one time scholarships he got from high school inthe number, but then they didn't billus for the 2nd semester until January so thats why his scholarship number is so high. If they had billed us the spring semester so we had a full year of tuition to worry about we would have been fine.
I'm thinking of just forgetting it this year then next tax season we will have a full year of tuition for the Hope.</p>
<p>That is what we did. Made more scholarship taxable by 'allotting it' to room and board, then claimed the Hope credit. As far as I can tell from looking at IRS 970 this is ok. I'm not tax accountant though.</p>
<p>You would still have next years tuition for the hope so, if it were me, I would claim it for both years. The (current) stimulus package has a $2500 education tax credit but I can't quite figure out if it is in addition to (don't think so), instead of, or an increase of one of the current credits. Supposedly part of it is refundable (meaning you get some money back even if there is no tax liability).</p>
<p>There is an example in Pub. 970 for the Hope credit...Page 13, Example 1 and 2: Jackie uses her unrestricted scholarship to pay tuition (example 1) or room and board (example 2) and how that affects expenses for the Hope credit. It's just what Swimcatsmom suggested, I think. </p>
<p>As long as the "taxable" scholarship doesn't raise total gross income over $5,450 I don't think he even has to file or pay any taxes. The FAFSA income protection allowance is $3,750. I haven't been able to find out if the Profile has an income protection allowance.</p>