<p>Thanks for the replies. Yes, my co-worker does work for H&R Block and has for about 10 years. She has offered to do my taxes for me for free but I don’t feel comfortable with her knowing my personal information and she has given me tax advice before that didn’t make since and when she was telling me that I had to claim my daughter’s sholarships when I told her my daughter was filing her own tax return, it didn’t sound right. I think I am going to try to do my taxes with turbo tax. I figure if I start and it gets confusing then I can just take my informtion to a tax professional but I want to try to do it myself because I have a few more college years ahead of me.</p>
<p>I would agree that you should NOT use the HR block “friend”. Lots of reasons why but really don’t do it. </p>
<p>Get the tax prep software and then just make sure you have ALL of your information with you when it’s time to do it (soon…right??). They have very good directions and a help screen for each item if you need it.</p>
<p>I use TaxACT and seems to do a fine job figuring all this out. You input the information and it figures out which of the various deductions and credits works out the best.</p>
<p>I’ve used the HR Block software for years. However, I’ve just discovered that it cannot handle a family with 4 kids in college…specifically the Opportunity Tax Credit. After inputting the info for our family, things were fine for the first 3 kids ($7500 total credit). But after entering info for student #4, the amount of the credit drops to $0 instead of increasing to the proper credit amount ($10K). After talking with customer service, they told me I will have to paper file and override the info…</p>
<p>Looks like I’ll be checking out some of the other tax software products!</p>
<p>I started using Turbo Tax years ago when H & R Block made 2 or 3 mistakes on returns over 2 years and gave really had bad advice when my son started college. I found out more plugging in my own numbers and going online to the IRS and CC : ) I heard of one agent who told a parent she could take off college search costs…wouldn’t want to explain that later.
We don’t have a lot of complicated stock/bond, other assets, so I’m okay, but after the advice which could have cost me dearly, I would always double-check.</p>
<p>We received a 1098T for our student today. There is a $15K difference between box 2 and 5. I contacted the school and one of the terms the student studied abroad–this is not qualified tuition expense even though the scholorship covered the study abroad tuition. I fully understand this will be taxable. Can the student file a tax return for this and still allow the parents to count the student as a dependent? Does she get any type of tax exemption or because we, her parents, plan to take her as a deduction, is it a straight tax on the $15K difference. Apologize if my question seems comfusing.</p>
<p>I’ve used Turbo Tax and TaxACT and had good experiences with both. I’ve done it for 10+ years.</p>
<p>My S has income for the first time this year…as I understand it I will claim him as a dependent, and he can file his own 1040EZ if he has money to get back. If he doesn’t, he doesn’t have to file at all as he only made about $1500.</p>
<p>I live in CA and my son is a freshman in AZ. I assume that he does not need to complete a return as he did not have any income or did not receive any fin aid at all. My wife and I are paying for his tuition and all other costs.</p>
<p>I plan to still list him as a dependent on my return as I have done in the past. I assume that I can do so on my CA state return as well.</p>
<p>Are my assumptions correct?</p>
<p>UofRbound?..This is our first year filing taxes with a student in college so I can’t guarantee we’re doing everything properly, but our situation is similar to yours so I’ll pass this on to you. D1 just started this school this past fall, so her 1098-T numbers only reflect one semester, but her scholarship amount exceeds tuition and fees just like your D.</p>
<p>We still claimed D1 as an exemption on our taxes and had her fill out her own tax return listing the over and above scholarship amount in the “Other Income” section and having her mark the box showing that she’s claimed on someone else’s taxes as a dependent. She still received a $5800 standard exemption on her tax return, which lowered her taxable income by that amount. We used itemized deductions on our return (mortgage interest, property tax, etc.) so I’m not sure what would happen if the parental return used standard deductions instead.</p>
<p>Assuming the parental tax return uses itemized deductions, I would expect that your D would end up with about $9200 of taxable income at the normal rate. Our D1 actually got hit harder on her state (Michigan) tax return though, as the full amount of her “over and above” scholarship money was taxed (albeit at a lower rate). Depending on your state, YMMV.</p>
<p>For grins I did alternate returns without her as a dependent on ours and not marking the box on her return regarding dependent status on someone else’s return. Her taxes improved somewhat, but our refund dropped considerably. At least in our case, the first scenario was much better overall than the second. In any case, I don’t think the Education Opportunity Credit stuff applies to us since her tuition and fees were fully covered (plus) by the scholarship money.</p>
<p>Again, I’m new at this as well so if I’m doing something wrong hopefully someone more knowledgeable can give us both some pointers. Hope this helps, or at least doesn’t confuse you 
.</p>
<p>^ As long as he is a full-time student at least half the year, and you provide half or more of his support, you can claim him as a dependent as long as he is under 24 at the end of the year.</p>
<p>My son earned 0, he has a tiny bit of dividend $ and a capital loss of $450. I wasn’t going to file for him at all. So you guys are saying because he got a scholarship of 8000 that he has to file a return? This amount did NOT cover all of his tuition. Also, for some reason the 1098 has 10500, not 8000. Does grant money count as scholarship $?</p>
<p>njfootball…As I understand it, any scholarship money that goes towards tuition and qualifying expenses (certain fees and books) is non-taxable income. I’m not sure how grants are viewed in the grand scheme of things. If his scholarship income does not exceed the cost of tuition, fees, and books then he probably doesn’t meet the threshold for filing. I would guess that even if the grants get factored in and that total does exceed tuition, etc. then the $5800 standard deduction should still bring his taxable income to zero. He may need to file a return in the second instance though.</p>
<p>^ If the amount of money he received (scholarships + grants) is less than the cost of tuition + other allowable expenses like books, then he has no taxable income, and you don’t need to file a return AFAIK.</p>
<p>I can’t remember whether a capital loss can be carried forward if there is no income to offset it, if it can you might want to file to preserve the loss for a future year.</p>
<p>notrichenough, so you think I have to file to preserve the loss? I thought maybe I could just put it on next year if I need it. I will ask an accountant friend of mine because that is a good idea, we plan for him to actually earn money this year! OR, maybe we’ll get a capital gain!</p>
<p>^ Hmm, some googling indicates it is not strictly necessary to file to preserve the ability to carry forward the loss, but it might make it easier if the IRS questions it, although for only $450 it probably falls below the radar.</p>
<p>Not an accountant, though.</p>
<p>Wolverine, we had the same experience last year when D had to report scholarship money on her MI tax return. OUCH!</p>
<p>So how do loans figure into all of this? Since our loans are paying part of room and board only they are not qualified expenses. Is the amount of loan distribution refunded into son’s account considered income?</p>
<p>^ Loans are loans, they are not income. Even if the loan money is sitting in your account, it is not income. They do not get reported on anyone’s taxes.</p>
<p>If the student received a scholarship/grant for room & board that totaled less then the 5800 standard deduction is there any reason for them to have to file?</p>
<p>If that is their only income, no. However, make sure you know your state income tax rules … in Michigan, the deduction is $3400, so a return may have to be filed MI even if it isn’t filed for the IRS.</p>