You can change it still. When you get H’s W2 it will list it in box 12 I think
The reason you have to list it is that it was not included in federal taxable income but will be added to income for FAFSA EFC calculation.
When I did our taxes with Taxact online last year it asked me if I wanted to print out a FAFSA worksheet, it listed all the things I needed off our taxes, even the 401k contribution on our W2. Otherwise I would probably have forgotten it too.
One other thing to be aware of. You can only declare scholarships taxable (for the purpose of the AOTC) if the terms of the scholarships allow it to used for other (non tuition) expenses.>>>>
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I have absolutely ZERO desire for any scholarship $$ to be used for anything other than these expensive Tuition & college fees… I wasn’t aware that there were “terms” for any of this… you just assume those automatically go for paying college costs… .
https://studentaid.ed.gov/sa/fafsa/filling-out
See third point, Getting help.
No, I don’t think so.
We told you about the AOTC 5 months ago, and provided a link to Publication 970 at that time.
You don’t seem able to understand it.
Talk to your ‘tax man’ about it.
You are still not understanding taxable scholarships and the AOTC. If your son received scholarship or grant money (not loan money) for room and board, it may be taxable to him. For one semester, it probably is within the $6300 personal exemption, but he can't just guess at that. If you and he agree, you might be able to get the AOTC of $2500 (and that bible can be considered a Qualified Educational Expense but the room and board, dorm supplies, etc. can't be) even if you didn't pay any amount out of pocket. It's explained in Pub 970.
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Say his tuition/fees/books were $10000 and his R&B was $5000 for one semester (fall 2015). If he got a $15000 scholarship, $5000 of that would be taxable scholarship to your son. If this is his only earnings, he is within the personal tax exemption and he likely will have no tax liability. However, you’d get no AOTC because all the tuition/fees/books were covered by scholarship. If you CHOOSE to do so, he could claim $9000 in taxable income, use his personal exemption of $6300, and pay taxes on $2700. You’d get a $2500 credit on your taxes (if you owe that much in tax, but $1000 is available to you even if you owe nothing).>>>>>>>
I like that you said CHOOSE… because it’s just an option… I am going to print what you said here out & take it to our Tax man… then he can better advise us on this… sounds like a tremendous hassle to me though… I can’t attempt any of this on my own… then if the Tax man does this… I will be further confused on HOW in the world to fill out his Fafsa after this…for his income… etc…’
We’d have to have the Accountant do it all then…square us away…then pay those fees… so it would have to be worth making something out of this confusion…
The opposite. The AOTC is to help the parents (if the student is a dependent) recover some of the costs paid for tuition, books, and fees. It is more likely you’d benefit from AOTC if you paid the costs, as it seems you did. You don’t understand how it benefits you to have $2500 as a tax credit? It’s cash in your pocket that you can use to pay for next year’s fees and tuition.
You pay the tax guy to do this. He should know how the credits work. Your responsibility will be to bring him all the documents: the 1098T from the school, the amounts you have paid for books and supplies (not dorm supplies, not cash to your son, but required supplies for classes, like a calculator for a math class or goggles and an apron for a lab), the bill for tuition, room and board, the scholarships he’s receive. All you’d probably need is the tuition bill if it lists all the tuition and fees and the scholarships applied, and a list of books you paid for. The accountant should be able to figure it out from those documents.
R&B is not a QEE. Money you give to him is not QEE It doesn’t matter if you paid $9500 or $20,000, it matters what the money was used for. Tuition? That’s a QEE. Smoothies? Not a QEE.
You would have to run all the numbers from the student’s college billing statement. But from what you posted last year it seems that tuition is higher than all aid by a small number.
Just give the tax person all the info and they should be able to figure the tax credit and taxable scholarships for son2.
You get a child tax credit, AOTC is another credit helping families with college expenses.
I clicked on that link to read #6
Q6. What costs does a Federal Pell Grant cover? A6. Federal Pell Grants are available if you are taking classes as part of a program that leads to an undergraduate degree or certificate. Federal student aid, including Pell Grants, can be used to cover a variety of costs, generally including:
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Tuition and fees normally assessed;
Books, supplies, transportation, and miscellaneous personal expenses;
Living expenses such as room and board; and
An allowance for costs expected to be incurred for dependent care for a student with dependents.>>>>>>
I see it can be used for other things… for our situation…we only want these things to go for paying the BIG PRICE of college … we fully expect to pick up every book out of our own pocket (& saving receipts for our taxes)… pay for transportation needed… and anything/ everything miscellaneous & personal …
^^^
You’re leaving money on the table, potentially a lot of money, that would take very little effort to claim. But to each his own, I guess…
Its like having a bunch of kids and then qualifying for but not understanding the ~$1,000 child tax credit x number of children under 17~ and not claiming it (which is free money) out of ignorance.
It will make more sense once taxes are done.
Your sons 1,2,3 are all most likely ending up with student loans. Some of the younger kids might not get enough aid once they go to college and your out of pocket costs might go up. Your savings and the tax credits can help.
It’s not that big of a hassle for someone who does a living doing taxes, other people have much more complicated tax returns.
I posted the link about Pell grant to show that it can be used to pay for room and board.
Someone posted about some limitations of scholarships and grants and what they can be used for.
Okay understand that the tax code is not always logical. Let me try to explain it another way. Might not be 100% correct but it maight help you understand.
Say you get 10K in scholarships and tuition/fees/books cost 10K. You have no QEE to use for AOTC because the tuition/fees/books is paid by a tax free scholarship. Now by declaring 4K as income to the student you are giving up the tax advantage of that 4k being tax free in exchange for having the IRS treat the 4K as taxable income. You are using that taxable income to pay the QEE not cover by tax free scholarships.
So the issue boils down to this. Your can not use any QEE for the AOTC that was paid for with tax advantage money. Scholarships lose the tax advantage status when you declare them as income subject to income taxes.
This is not a tax scam/dodge. There are clearly stated example of this in IRS Pub 970.
https://www.geneva.edu/financial-aid/aid-types/scholarships_awards
@OverRunMama, I found this on Geneva’s site. Seems GPA for scholarship is checked after spring semester, so son2 has a chance to pull up his cumulative GPA to 3.0 this semester. Also check with them if amount would be reduced if he was under it or if he totally loses the $10,000 scholarship.
He should go to tutoring center and join study groups for his harder subjects.
The opposite. The AOTC is to help the parents (if the student is a dependent) recover some of the costs paid for tuition, books, and fees. It is more likely you'd benefit from AOTC if you paid the costs, as it seems you did. You don't understand how it benefits you to have $2500 as a tax credit? It's cash in your pocket that you can use to pay for next year's fees and tuition.>>>>>>
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To be honest with you… I feel so thankful that he/ they are even eligible to get these grants, scholarships that they do… that I would be a miser to take any more $$ from the Government… some parents have to pay out the butt for this stuff. and our cost has been SO LOW… (if anyone is familiar with my 1st postings here… we were almost facing paying $10,000 a year out of pocket for University of Pitt )- thank God we changed colleges in the nick of time!! this have given us such peace of mind… I feel such gratitude.
I learned those EFC calculaters mean basically NOTHING…what a Joke… in that case, I would be JUMPING for all this help. but at paying (out of pocket $3,000 a son a year )…I am not seeing that I need this help given back to me… and if sounds if it is… it then has to be taxed by son ?? I don’t know…
I get the tax guy can do it… I’ll definitely bring it up. I hope I don’t sound as flustered with understanding it all -as I do here…
You pay the tax guy to do this. He should know how the credits work. Your responsibility will be to bring him all the documents: the 1098T from the school, the amounts you have paid for books and supplies (not dorm supplies, not cash to your son, but required supplies for classes, like a calculator for a math class or goggles and an apron for a lab), the bill for tuition, room and board, the scholarships he's receive. All you'd probably need is the tuition bill if it lists all the tuition and fees and the scholarships applied, and a list of books you paid for. The accountant should be able to figure it out from those documents>>>>>>
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we didnt’ buy him a calculator… we had one. we didn’t buy him goggles… husband has a bunch… I think we bought his laptop Christmas 2014 - so that wouldn’t qualify either… the only expense I can bring is his books… if son doesn’t get the invoice for his $300 chemisty book - I don’t see it in my amazon account… he must have bought it…(don’t remember who bought what)… I won’t have anything to offer at all .
I found this on Geneva's site. Seems GPA for scholarship is checked after spring semester, so son2 has a chance to pull up his cumulative GPA to 3.0 this semester. Also check with them if amount would be reduced if he was under it or if he totally loses the $10,000 scholarship.
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He should go to tutoring center and join study groups for his harder subjects.>>>>>>
Yes he should do just that… … he loathes the religious classes…cant get tutored for that… if anything… this could screw him up… I have him accepted at a cheaper college if all else fails… but if he goes there he has to drop the Engineering part… and just go with Chemistry… we are sure hoping this is not what happens… just wanted that fall back school… and both of these he can drive to… if need be… though I have a feeling if this happened… he wouldn’t study as well …
^^^ You're leaving money on the table, potentially a lot of money, that would take very little effort to claim. But to each his own, I guess.>>>>>>
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<<<<<<<<<its like=“” having=“” a=“” bunch=“” of=“” kids=“” and=“” then=“” qualifying=“” for=“” but=“” not=“” understanding=“” the=“” ~$1,000=“” child=“” tax=“” credit=“” x=“” number=“” children=“” under=“” 17~=“” claiming=“” it=“” (which=“” is=“” free=“” money)=“” out=“” ignorance=“”>>>>>>
Well I much appreciate you all telling me how foolish this is. (I mean that truly!..I am smiling as I type this) … I need to hear it… We will take advantage of it… if our accountant is for it… for sure !
Your “tax guy” should have been claiming the AOTC for you in past years, if you were eligible (and it sounds like you probably were, although some portion of scholarships may have to have been deemed taxable).
Does your “tax guy” give you a copy of your signed returns for your personal records, after they have been submitted to the IRS each year? If not, he should, and you should insist on this. If you have a copy of last year’s return (2014 tax year), look and see if Form 8863 was filed. This is used for figuring education tax credits. If Form 8863 was filed, there should also be entries on lines 50 and/or 68 (if you filed a 1040) or 33 and/or 44 (if you filed a 1040A).
Does your "tax guy" give you a copy of your signed returns for your personal records, after they have been submitted to the IRS each year? If not, he should, and you should insist on this. If you have a copy of last year's return (2014 tax year), look and see if Form 8863 was filed. This is used for figuring education tax credits. If Form 8863 was filed, there should also be entries on lines 50 and/or 68 (if you filed a 1040) or 33 and/or 44 (if you filed a 1040A)>>>>
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I have it in front of me… going through the pages…
Then it goes into STATE Taxes… so that’s it (but last year was also before 2nd son went off to College)…
If I looked back about 4 yrs ago… Hmmm I think I was doing my own taxes when 1st son started going… I think by his 3rd year we hired someone… that guy was a mess- got the SS numbers wrong, it came back. then we got this outfit -which we are very happy with… with 1st son… literally we paid NOTHING …in fact. it seemed he was getting money from his Grants that he could spend … which I found very odd… He attended the cheapest college in the state. He does have loans to pay back -like $20,000 after 4 yrs for a Psychology degree …