<p>Okay, I have been studying all the old threads on the subject and trying to pull it all together...but I need a little help. hopefully some of you kindly "experts" can share your input. </p>
<p>S receives full tuition, fees, room and board in scholarships, (yes pretty amazing, very grateful) He files his own tax return and I pay the tax on his taxable scholarship amount, which is over 11K. I do pay for his books and last year using Taxact I was able to simply enter the books expense and qualified for an education credit on my return. This year it seems Taxact is asking for 1098T info to be entered if the student received one, and as you can see below it breaks down where they show his books ($1460) as qualifying educational expenses. But I don't really see how this qualifies him/me for all three of those tax credits as I am not paying any tuition. Can anyone explain this, is that actually correct?</p>
<p>Qualifies for:<br>
American opportunity credit: Yes
Lifetime learning credit: Yes
Tuition and fees deduction: Yes
Total education expenses: $43,025
Taxable scholarship income: $11,049
Total tax-free assistance: $41,565
Total qualified education expenses: $1,460</p>
<p>Also, my d's college does not supply any 1098Ts, however she did one semester study "exchange" and that school supplied a 1098T showing $5. in billed expenses, no scholarships. She actually used her home school scholarships to pay for the tuition but there is no place on the Taxact software to put her tuition. If I then put in her scholarships it doesn't seem to make sense. Befuddled by 1098Ts here...</p>
<p>Thanks for wading into this and even reading the excruciatingly annoying details...truly appreciated! Sending double fudge brownies, (fat free of course) to anyone who even tries to help... ;)</p>
<p>Not sure exactly what you are asking. Required books *are *a qualified education expense for the American Opportunity Credit, so yes you can get the credit assuming you claimed your son as a dependent (and meet income limits). If you do not claim your son as a dependent, then only he is eligible for the credit. If you claim him as a dependent, then only you can claim the credit. Depending on your income level, you may be better off claiming him as it is quite difficult for a student under the age of 24 to be eligible for the refundable part of the credit. </p>
<p>sorry if my question wasn’t clear. so the three items below are correct as they appeared on Taxact?
American opportunity credit: Yes
Lifetime learning credit: Yes
Tuition and fees deduction: Yes</p>
<p>and I should enter my son’s 1098T on my return so I can qualify for the credit. as I mentioned, last year I did not have to enter that, previously it only asked for qualified expenses.</p>
<p>and for my d’s, should I enter the scholarships she received even though there’s no place to enter tuition?</p>
<p>My understanding is your tuition and books would have to exceed the amount you received in grants and scholarships to be eligible. I was in the same situation with my son and the only thing the book expenses did was to lower the amount of taxable income he had to report. We were not eligible for any education credits. Say, you received $15,000 in grants and tuition was $12,000 and you spent $2,000 in books. You would not be eligible for the education credit and your son would have $1,000 in taxable income to report. In the same scenario if tuition was $14,000 you would be eligible for an education credit on the $1,000 over the amount received and your son would have no taxable income to report. That is my understanding but I would confirm with the IRS if I were you.</p>
<p>One other note, the college may report on the 1098T all expenses billed but it doesn’t mean they were paid in 2011. Many second semester bills come out in 2011 but aren’t paid until 2012. In these instances you may need to divide by two the amount listed as billed. See below:</p>
<p>An institution may choose to report either payments received (box 1), or amounts billed (box 2), for expenses. However, the amounts in boxes 1 and 2 of Form 1098-T might be different than what you actually paid. When figuring the credit, use only the amounts you paid or deemed to have paid in 2011 for qualified educational expenses.</p>
<p>My son’s school was like this in that they listed the entire tuition amount for the year but only half of that was paid in 2011. They did list the amounts of grants correctly so it might appear as there were more educational expenses than grants in looking at the 1098T. See Publication 970 for more information.</p>
<p>thanks again, even though my s’s scholarships cover all tuition and room and board, his books are a qualified ed expense and after entering his 1098T info and listing his books as an expense according to Taxact;</p>
<p>Qualifies for:
American opportunity credit: Yes
Lifetime learning credit: Yes
Tuition and fees deduction: Yes
Total education expenses: $43,025
Taxable scholarship income: $11,049
Total tax-free assistance: $41,565
Total qualified education expenses: $1,460</p>