<p>Hi, everyone! I'm having some tax issues and hopefully someone can help me out. </p>
<p>I'm trying to enter the information from my 1098-T into Turbotax and running into a few problems. The difference between my scholarships and amount billed is $8578, which I understand is taxable income. However, it's showing that I owe nearly $9,000 in federal taxes, almost $3,000 where I attend college, and about $50 in my home state. So, that's a problem. I've tried it a few times and have no idea what I could be doing wrong, and it was giving me a refund before I put this stuff in. </p>
<p>So, the big thing is that I'm a dependent on my parents' tax return. But they didn't pay a dime. I spent around $250, the rest was around $2500 in loans. Can anybody tell me what's going on? The idea of having to pay a few hundred dollars is a big enough problem for me.</p>
<p>Hi. I know that TurboTax is not the most friendliest program to use. But hopefully u r using the freedom version free fed and state. First call about ur probo but my suggestion is when it asked if the 1098 amount is different put the different amount. Next if u pay for all ur room and board year round. It is illegalfor your parents to say you are a dependant on their taxes. But I understand they r your parents</p>
<p>Sent from my HTC One X using CC</p>
<p>Wait, why is it illegal? I’ll be 19 next month but I’m a full time student.</p>
<p>If your parents are providing more then 50% of your support then you are considered a dependent.</p>
<p>If you are providing less than half your support, it’s not illegal. Scholarships/grants don’t count as support you are providing yourself. Very likely it’s fine with your parents claiming you as a dependent.</p>
<p>As for TT and the 1098T. It’s very complicated going through the education parts of tax software. There are many questions the programs need to ask and sometimes the questions aren’t that clear. Use whatever help or extra explanation the program has so you fully understand what the program is asking in each question. Beyond that I don’t think there’s much more anyone here can help with without more specific questions.</p>
<p>Double check the numbers you’ve entered and if there are specific TT questions your not sure of you could post the question.</p>
<p>Edit: With it saying you owe $9000 on that amount it sounds like maybe you entered an extra digit for the scholarship amount. Can you view the actual tax forms in TT? If so, which line shows an unusually big number?</p>
<p>They don’t pay for any of my school stuff, but I live under their roof and they feed me and all that…is that enough?</p>
<p>Okay, so after I put in the info from each box (which there’s no way I could really mess up) the tax I owe goes $426, which is not the greatest (I’m a questbridge student) but makes sense. After I put in the actual amount I paid to them it jumps up to several thousand dollars. When it asks about scholarships not on the form-which it says includes Pell Grants-I put mine in (4100 for the year) and it jumps up even more.</p>
<p>Probably. They don’t have to provide half your support to be able to claim you as a qualifying child. If you do not provide half your own support (which is likely if you take into account living expenses, medical insurance etc), then you are their dependent for tax purposes.</p>
<p>Have you talked to your parents about your tax situation? What we did with our daughter while she was in college was claim her as a dependent, which enabled us to claim the American Opportunity credit. But we paid her taxes for her.</p>
<p>The pell grant is already included in the 1098 info, there is no need to add it in again.</p>
<p>I haven’t mentioned it them since I’m still trying to figure out this ‘owing more money than I’ve ever seen in my life’ thing. My uncle does our taxes and I don’t really know if they’d know how removing me as a dependent would effect them. They can’t pay my taxes for me. It’s not that they wouldn’t want to, they just can’t.</p>
<p>It is hard to imagine that you could owe thousands of dollars. Can you tell us your exact numbers - how much your tuition and fees were for the semester, how much your scholarships were, books etc. </p>
<p>Sometimes the programs ask the questions in a way that is easy to misunderstand if you don’t know the tax rules. I did my daughter and son in laws taxes for them the other day and the way they were answering the questions had them owing taxes instead of getting a refund.</p>
<p>Pell grants should be included in the 1098T box 1 or box 2. TT really says they shouldn’t be? That’s not right.</p>
<p>Are you sure you put the amounts you paid in answer to the correct question? Those amounts should decrease the tax owed, not increase it.</p>
<p>Were you in college only fall semester 2012 or both spring 2012 and fall 2012?</p>
<p>Thanks, okstategirl. I added it because the info said this:</p>
<p>"Scholarships/Grants Not on a 1098-T</p>
<p>A scholarship or grant is generally money that pays for a student’s undergraduate or graduate education.</p>
<p>Enter scholarships and grants that were used to pay for tuition, fees, books, supplies, and equipment, and the student was required to pay the institution for these expenses.</p>
<p>Examples include Pell and Fulbright grants.</p>
<p>This is not common. Don’t enter scholarships or grants that were reported as income in box 1 of a W-2."</p>
<p>So this is incorrect?</p>
<p>My amount billed (box 2) is $42,082. Scholarships and grants (box 5) are $50,660. I’ve paid $236. It says I can’t do anything about books since I’m a dependent.</p>
<p>All scholarships and grants should already be included in the scholarships and grants on the 1098.</p>
<p>I’ll leave out the Pell stuff. That’s terrible that they have incorrect information on there. </p>
<p>annoyingdad, when I say that the 42082 is the actual amount paid rather than the $236, it drops to a much more reasonable number, so you probably have the right idea. But it’s emphasizing that it’s the amount you actually handed over and to check your account statements, and I definitely didn’t give them that much.</p>
<p>Oh wait, maybe I figured it out? For the amount paid, it says, “Enter the amount that was paid to Wellesley College for tuition and expenses even if the amount was paid by someone else, such as a parent, friend, scholarship, or fellowship.” (They really shouldn’t say to check your bank statement, then…) Does scholarship include grant money? If I put in total term credit and payments I have listed in my student portal everything goes back to normal. I don’t want to put the incorrect information, though.</p>
<p>
That does not make any sense. required books can be used to reduce the taxability of scholarships. It does not matter whether you are a dependent or not.</p>
<p>The basic rule is that scholarships/grants used to pay for qualified education expenses are not taxable. Qualified education expenses include tuition/fees/required books. Scholarships used to pay for unqualified expenses are taxable. Unqualified expenses are things like room and board.</p>
<p>Scholarships and grants are treated the same as far as taxes are concerned.</p>
<p>Yes, treat grants like scholarships and yes, you can add required books and supplies as qualified expenses if they weren’t billed by the college and aren’t already included in the box 2 amount.</p>