So I attempted to do my taxes on both Turbotax and H@R Block. After putting in all my information, one question on H@R block increased my refund nearly double. The question was “Are you including any of your grants and scholarships in income?”
My question is, is this a good idea? Backstory, I received both pell grant and cal state grants for a total of $5,624.00. My qualified tuition was $3,209.50 (In addition to this, I paid around $200 dollars of non-qualified tuition). Working two jobs on campus, I made $3,756 dollars for the year (I am pretty much poor). Now, after learning this, I went back to Turbotax and found a similar question “Was any of the scholarship income not designated to pay 2015 education expenses?” Are these two questions asking the same thing? Should I include the left over $2414.50 from my grants as income? (which disappeared after 6 months of commuting, eating, and paying my parents rent anyways) Would I get in some kind of trouble?
I know this sounds like a tax question that I should be bringing to a…tax forums? But I figured I would ask other college students and see what they think.
Oh, I nearly forgot. Including the extra grant money as income gives me the AOC credit (Includes my refund from $320ish to $550). It’s not much but its something. I just don’t want to get in trouble for like…tax fraud or something because H@R block asked me a question I was confused about lol.
It’s possible the best scenario is that your parents claim the AOTC on their tax return instead, and then give to you the tax savings from the credit, which is up to a maximum of $2500.
Are you your parents’ dependent? Are you a freshman in college?
The AOTC is a maximum of 100% of the first $2000 of tuition paid and 25% of the next $2000 in tuition paid.
It sounds like you didn’t have $4000 in qualified education expenses (tuition/fees and required books) so the maximum credit would be slightly less than $2500.
You would need to include the cal grants and Pell grants in income on your tax return in order for the AOTcredit to be allowed, since you didn’t pay any tuition with non-tax-advantaged dollars (non grant money).
But since your total taxable income wouldn’t be too much over the $6300 standard deduction, the liability wouldn’t increase much.
You would get a smaller refund/owe more, but your parents might get a $2000+ credit (which you could ask them to give the cash to you to save for future college expenses, or share some of it with you).
If the grant amount was higher than qualified tuition, wouldn’t OP have to include the $2,414.50 in income as taxable scholarship/grant anyway?
Did you pay for books and have receipts?
I think the HR block question asks about taxable scholarships reported in income and the other question asks if any scholarship money was used to pay for expenses for a different year, not 2015.
Your work income and excess grant income adds up to $6,170.50 so that would be under the standard deduction so your tax should not change.
Are your parents claiming you as a dependent on their tax return?
Did you get a 1098T? From what I remeber from the Turbotax interview for education credit it asks about college attended, fulltime student, box 2 billed qualified tuition and fees (or box 1) from 1098T, box 5 (scholarships/grants) from 1098T, other expenses for books.
You might also want to bring last several years’ tax returns, it seems from another post that you have been in community college for a few years.
If your grants were more than qualified tuition, fees and books, then you were supposed to report that amount as taxable scholarship/grant on your tax return.
@ #3 I am over 24 so I am claiming just myself. Plus my parent is disabled (blind) and only collects SSI so she does not do her taxes. I am currently a Senior at a CSU. Fall 2015 was actually my first semester hence why I am having a hard time trying to figure out how to calculate this.
@ #4 I did pay for my books and tests taken required for enrollment. However, most of my books were bought off other students. I can always go back and get a “receipt” but would that be okay? That would add $400-500 in expenses. My parents cannot claim me as a dependent because of my age.
@ #5 I did receive a 1098T. All I did was add in the exact numbers when it asked. I did not modify them in any way.
@ #6 So I HAVE to include them in taxable income. Wouldn’t turbotax do that automatically? I know that H@R block specifically says I have to add them to a W-2. But which one? Both my jobs were 1. working as a tutor for my community college before I left Summer 2015 and 2. working as a tutor/online tutor for my CSU for the rest of the 2015 year.
@ #7 During my last year of community college, I never received financial aid (over credits). So where would I add that amount? Would it do it automatically or fill in an Income report with no W-2?
If the tax questions determine that your grant amount was higher than your qualified tuition, then the numbers should be put on the forms for you.
If you had other qualified tuition, fees for the spring 2015 semester at the community college and did not get any grants to help then you can also add those expenses to the ones for the CSU.
The interview in Turbo tax should ask which schools you attended. Did the CC also send a 1098T?
I was talking about having someone look over your previous years’ tax returns to see if you did them correctly.
If you got grants for community college those years and it was more than the qualified education expenses then you might have to amend those returns.
For books, not sure if a receipt from another student counts.
Basically you need to know the following:
What was your W2 income from work in 2015?
How much was the total of grants you received in 2015?
What was the total of qualified education expenses (tuition, fees, books) for the CSU and CC (if you attended in 2015) for 2015?
Like I said if you are confused about the questions in the software you could get some free tax help by searching if they have places in your area.
@mommdc is correct. If you enter the numbers as shown on the 1098-T Turbox tax should automatically fill it in for you. As for the CC did she receive a 1098-T from then as well. If so you should have an option to enter another a second 1098-T. Is this the 1st time you filed your taxes yourself?