Do you add your child on to your tax return? I did with my older son in the past. But I need to make sure. I thought at the time we had to to claim the college credits. Also we would get more back claiming him? Yes?
Yes, add your child to your tax return. He’s still your dependent, assuming you paid for more than half of his support during 2015. And you can get the American Opportunity Tax credit that way, if you spent $4,000 or more on qualified expenses (not counting what came from a 529).
Your son has to be a dependent on your taxes to claim the AOTC. If he has his own income, he may also have to or want to file his own return too.
Thanks, thats what i was understanding. Now Im confused. How does that work with his own income. last time we added his income on our return. Was that wrong?
No, you don’t add his income onto your tax return. He files his OWN tax return. He would need to file if his income was above,the threshold for,filing…or if he had deductions taken out and was entitled to a refund.
But no…your son’s income does not go on YOUR return.
Ty, I looked back at my returns and i guess I did do it right. Put my son on our return as a dependent and he filed his own return. For some reason i thought we added his income to our return. thanks again
Re post #1 - You can take the AOC even if you spent less than $4000 on qualified expenses. $4000 is for the max $2500 credit. If you only spent $2000 on expenses, the credit is the full $2000.
There is a way to add a dependent’s income to the parents’ return instead of the dependent filing, but I have never done it so am not familiar with the particulars. I think it has more to do with unearned income than earned.
Under some circumstances you can add a child’s income to parent return, but only interest income I think and up to a limited number.
Work income or taxable scholarship income needs to go on the child’s own return.
But taxable scholarship income is taxed at parents rate if it exceeds standard deduction of child
When our son was in college of course we could claim him. It’s about being a dependent, not about being a student. He had tax forms in his name as well because of investments we made in his name. We/he changed his status near the end of his undergrad years when our tax preparer calculated it saved money for us not to. It’s purely a monetary thing, financial support allows you to declare a person, not their age or student status. btw- it was a relief when he aged out of needing to count our income when calculating taxes on the investments we had made in his name.
You son can be dependent on your return while he files his own return if claims 0 on his return.
“financial support allows you to declare a person, not their age or student status.”
This is not an accurate explanation of the current income tax test for dependency.
Thanks I updated above. I had it correct with my older son. Not sure why I was thinking we added his earned income to our return.
I am confused on how they figure The American Opportunity Credit? The current return says we get $265. Which is the difference between box 2(billed amounts) and box 5(scholarships and grants).
In 2013 when I filed with my older sons 1098-T he got $701. The difference between box 2 and 5 was $1323
You don’t get anything for AOTC just because of the boxes 2 and 5 of 1098T. It is just information the college provides (although from 2016 on I believe a 1098T form is required if you want to claim AOTC).
You claim the credit by providing the amount of qualified education expenses (QEE) you paid during the tax year.
So for example if box 2, billed tuition and related fees is higher than box 5 scholarships and grants, then you can claim that amount as qualified tuition and fees for AOTC. But you can also add the cost of textbooks.
And you can also treat some of the scholarships as taxable and have the student include them on his tax return as income and then claim more for QEE for the AOTC.
Read IRS publication 970. https://www.irs.gov/uac/About-Publication-970
Well the books are included. He didnt have to pay for them separately . Though they are included/itemized in his fees.
I used H&R block(online). The online info I imputed was the 1098-T how do they know how much I get back? Oh and his scholarships were only about $600.