<p>Here's my situation. Freshman daughter received need based grant for total cost of attendance ($6313 - tuition and $6300- room/board, books, transportation, living expenses). No monies were paid by parents for any college expenses, but daughter is considered a dependent. My understanding is that tuition is not taxable, but everything else except books ($500) is taxable, so $5800. Daughter had no income for 2013. Questions- 1) Who files the 1098t? Student or parent? 2) 1098t form has grant money for entire 2013-2014 school year. Do the amounts need to be reduced to one semester, or just go with what's on the statement? 3) Do education tax credits come into play here?
This is all so confusing. Thank you. </p>
<p>1) The student would report the taxable scholarships on her tax return.
2) She should report the received and paid amounts in 2013.
3) You don’t have qualified educational expenses to claim the tax credits; unless your daughter report more taxable scholarships. See pub 970 </p>
<p>Thank you.
- Will work on TurboTax for that then.
- So for 2014 taxes will be using the second semester costs of 1098t for 2013 AND first semester costs of1098t for 2014? Why don’t the universities just prepare forms for calendar year?
- Darn.</p>
<p>!) If student had no other income, she will not owe any taxes as she is under tat threshhold. FOr recordkeeping purposes, it may be wise to fiel everything as it won’t be so clear three years later
2)Yes, and it’s a pain
) No darn to it. You didn’t pay so you don’t get the tax credits. But…if you can scrape up every single thing that goes into the COA, and have the scholarships got towards those (still no tax owed until she hits a certain threshhold) and claim the residiual cost, you might be able to get some of the tax credits. If she got an award that is full COA (ask the college what that number is), then no, you don’t get any tax credit.</p>
<p>2) They report what was billed and credited in the calendar year. If 2nd semester 2014 was billed and grants credited in December, then they did report by calendar year. Are you saying the full academic year grants are on the 1098T, but not the full academic year qualified expenses? You should always verify the amounts on the 1098T by looking at bills/online account statements.
3) If you had paid something toward R&B, it would have been possible to ‘shift’ some of her grants to non-QEE for you to claim the AOC by having her declare more of the grants as taxable. But since you said you paid nothing at all, then you can’t.</p>
<p>You didn’t mention any mandatory fees but they are qualified expenses too and should be on the 1098T.</p>
<p>cptofthehouse:
- Yes, she had no other income and won’t owe taxes but she should still file? One of the other threads I read said since she is a dependent, parents should file the 1098t.
- “every single thing that goes into COA” - you mean beyond what her grant is that would come out of parent’s pocket? Daughter received full estimated COA on school’s website, which included tuition, books, r/b, transportation, living expenses. Still need to confirm COA?</p>
<p>annoyingdad:
2) 2013 1098t lists qualified tuition and related expenses (box 2) and scholarships or grants (box 5) for first AND second semester of 2013/2014 academic year. Box 7 is checked noting tuition includes period Jan-Mar 2014. So do I use the entire amount reported on form or just the first semester 2013 expenses?</p>
<p>
If the 1098T is used for the tuition credits, it goes on the return of the person claiming the student. In this case, that of the parents. If the 1098T is used as taxable income because the scholarships exceed qualified tuition, then it goes on the return of the student.</p>
<p>In this case, because the taxable amount is less than the standard deduction, there is no filing obligation for the student.</p>
<p>SInce both grants and expenses for spring 2014 are on the 2013 1098T then you report them for 2013 taxes. They must have been billed and credited in 2013 and would be reportable for 2013.</p>
<p>It is absolutely not correct for the parents to report scholarship/grant income. Scholarship/grant income is considered earned income for this purpose and parents can never report a dependent’s earned income, only unearned income. Was that other thread referring to the 1098T with regard to education credits. Those are taken on the parents return but you don’t have any expenses.</p>
<p>The standard deduction for dependents for 2013 is $6100 and that’s the cutoff for having to file. From your first post it looks like she is just under that after subtracting book/supplies but you could run through turbotax to confirm that. Did she buy her 2nd semester books in 2013? If not, you can’t use that expense to offset grants in 2013.</p>
<p>All the details of taxable scholarships/grants and the education credits are in IRS Pub 970:</p>
<p><a href=“http://www.irs.gov/pub/irs-pdf/p970.pdf”>http://www.irs.gov/pub/irs-pdf/p970.pdf</a></p>
<p>annoyingdad:
I’ll have to have daughter check the online account, but I really think that spring 2014 tuition and grant monies were billed and credited in Jan not Dec. I also believe she purchased spring books in jan so thanks for the reminder to put that expense in 2014.</p>