<p>This will be my first year for college expenses and taxes so bear with my questions:</p>
<p>My son is a freshman in college full-time (in a dorm, etc.) but had a part-time job so he will file a 1040EZ for his earnings. However, I will claim him as a dependent on my taxes (1040) since we still support him (typical scenario- comes home over breaks, basically just supports himself with spending money and minor school/living expenses, otherwise, on our tab). </p>
<p>So, as far as the taxes, who claims these forms on their taxes? parent or student?
- 1099-Q - The 529 Plan that I contribute to and am the designated 'Recipient' but my son is the 'Beneficiary' (I pay into the account but the money goes towards his education). I assume I claim this since I am the 'Recipient' on the 1099-Q form. </p>
<ul>
<li><p>1098-T - The Tuition Statement that will be in my son's name but we are paying the bill from the 529 so to me, it makes sense for me to claim this on my tax form as well but is that possible if it has my sons name and not mine? </p></li>
<li><p>Student loan - If this is accruing interest now, how does that work if the loan is deferred until he graduates (or at least while he is full time)? It's a small one so he can contribute and help us stretch out the 529 saving. Our plan is to have him pay it down when he returns to working more over the summer but meanwhile, how does this work for taxes. Does he claim the interest each year or do nothing until he starts to pay on it? </p>
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<li>Any other education-related tax nuggets appreciated as well. </li>
</ul></li>
</ul>
<p>Thanks!</p>
<p>Forms don’t get claimed on taxes. Credits, deductions, exclusions etc. get claimed on taxes.</p>
<p>For the 1099Q, if qualified education expenses for a 529 distribution: tuition, mandatory fees, required books and supplies, room and board if at least a 1/2 time student exceed the amount of the distribution, then nothing gets reported on taxes by either the student or parents. If there is an excess distribution, then whoever’s name/ssn is on the 1099Q reports the earnings portion of the excess as taxable income and perhaps pays a penalty.</p>
<p>For the 1098T, it’s purpose is to alert families to the expenses that can be used for the American Opportunity Credit. Tuition, mandatory fees and required books and supplies are QEE for this. Book and supply amounts won’t be on the 1098T. For a tax dependent student, only the parents can take this credit.</p>
<p>I’m not very familiar with the Student Interest Deduction but I doubt you can use it until interest is actually paid.</p>
<p>You can’t use the same expenses for more than one tax benefit.</p>
<p>IRS Pub 970 has all the info about education related tax matters.</p>
<p><a href=“http://www.irs.gov/pub/irs-pdf/p970.pdf[/url]”>http://www.irs.gov/pub/irs-pdf/p970.pdf</a></p>
<p>Adding that the QEE for both the tax-free 529 distributions and for the AOC have to be reduced by the amount of non-taxable scholarships and grants the student may have received. If scholarships/grants exceed the QEE I listed for the AOC, the excess is taxable income to the student.</p>
<p>Just be careful…Qualified Education Expenses do not have the same meaning when applied to 529 withdrawals and the AOC…very confusing!</p>
<p>
He claims the student loan interest deduction when he starts to pay back the loan. For loans made on or after September 1, 2004, the lender requires to report the capitalized interest and loan origination fees that are received. See Pub 970
</p>
<p>The 1098 and your own records of expenses not on the 1098 (like books) can affect both your returns. For the student, scholarships/grants in excess of qualified education expenses are taxable income to the student. For the parents qualified education expenses can be used to claim education tax credits. </p>
<p>Only interest that is paid in the year can be deducted.</p>