<p>(Copied here from wrong thread)</p>
<p>In Turbotax for our child, it put Scholarship Income on Line 11 of her Earned Income Worksheet and also on Line 13 of her Wages, etc., Worksheet. Those lines refer to scholarship income not on a W-2. It appears that this does not affect the outcome, but is it appropriate? I believe the IRS Pub says to put it in other income on the front of her 1040. Any guidance? Thanks a lot.</p>
<p>The IRS 970 instructions are quite specific. On the 1040, it goes on the same line as earned income. To the left of the numbers, the program should write SCH and the amount included in earned income that is from taxable scholarships. </p>
<p>For instance, if total earned income is $10,000 and $3500 is from scholarships it should read:
blah blah blah SCH 3500 10,000</p>
<p>It doesn’t matter where TT puts things on the worksheets. They aren’t submitted to the IRS. What you care about is where TT puts it on the 1040s. Swimcatsmom is correct of course. The pub reference is ‘How to Report’ on page 6 here:</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>But I have to know that the number is correctly placed in Ttax worksheets even though the IRS does not get the worksheets. But, okay, I will do as it says and park the number on there on the 1040. So will Ttax deal with that number from there, as far as her taxable income is calculated? I assume the amount will get added to other minor income for our child, and then she can take the standard deduction. Thanks for the help.</p>
<p>This isn’t really help, but when my son was doing his taxes, he started out on TurboTax, but then had to use another program because he couldn’t figure out how to show what was scholarship income. Not sure if there is a way, just know he couldn’t find it.</p>
<p>My son used TT and I am not sure where it ended up on the worksheet but the 1040 had it exactly where it was supposed to go- out to the left of earned income disignated with “SCH”.</p>
<p>
If you go through the step by step interview (in TurboTax, at least), and answer the questions correctly, the program will automatically place the scholarship amount on line 7 with SCH appearing on the line as it should. It’s always best to use the step by step interview with tax software rather than trying to complete the worksheet on your own.</p>
<p>If you can’t get TT to work, go back to the IRS website, and follow the efile links to their own “free file fillable forms”. If you enter the numbers in the correct spaces these forms will do the math for you. You might have to copy a number from some schedules into the 1040, but it isn’t that difficult if you know which forms and schedules you need to be using.</p>
<p>Thanks everyone for the help. I know it takes time to read these questions and respond. </p>
<p>So, would you all say that it is correct that our dependent gets a standard deduction if she meets these requirements (IRS says Scholarship Income is earned income):</p>
<p>Standard Deduction for Dependents
The standard deduction for an individual who can be claimed as a dependent on another person’s tax return is generally limited to the greater of:
<p>However, if the individual is 65 or older or blind, the standard deduction may be higher. </p>
<p>If you (or your spouse if filing jointly) can be claimed as a dependent on someone else’s return, use Table 8 to determine your standard deduction. </p>
<p>Earned income defined. Earned income is salaries, wages, tips, professional fees, and other amounts received as pay for work you actually perform. For purposes of the standard deduction, earned income also includes any part of a scholarship or fellowship grant that you must include in your gross income. See chapter 1 of Publication 970 for more information on what qualifies as a scholarship or fellowship grant.</p>
<p>Yes, assuming that W-2 income plus taxable scholarships/grants are greater than $5950 then the standard deduction is $5950. Otherwise its earned income including taxable scholarships/grants plus $300. But TT should be figuring that out for you based on the amounts you enter in response to the various questions TT asks.</p>
<p>I do my daughter’s taxes for her and turbotax does not do them correctly. I have to override their questions and enter just the taxable portion of her scholarships or it won’t let me take the American Opportunity Credit - it only lets her take it and I get a greater tax advantage putting it on my taxes then putting it on hers. I still use turbotax but you have to really know what you’re doing. You might try another software company if you are unsure.</p>
<p>@PhotoOp, I have used TT for years for both our taxes and my two children. I have never had a problem where the scholarship income was not correctly added. You must be doing something wrong.</p>
<p>Okay, maybe it is all coming together. Ttax has her scholarship income on Line 7 of 1040, and the source is Line 13 on the Wages, Salaries & Tips worksheet. Thanks for everyone’s help.</p>