<p>A while back I asked a question about what I should expect to receive from my college regarding tuition paid. I don't remember who responded (sorry!) but I believe I was told that I would receive a 1098T form from my college itemizing tuition paid by my family (which I assume will be minus any external scholarships, grants, need based aid, etc that was applied toward my tuition)</p>
<p>I haven't yet received the 1098T form. So, I apologize if this is a silly question, but who is responsible for reporting this amount on their taxes (and I do understand that not 100% is reportable for tax purposes). My parents claim me as a dependent on their taxes, so my guess is that they would probably be the ones to report the tuition credit. But, I'm thinking the 1098T form will probably come in my name not theirs, so I wasn't sure if that means that I have to report it instead.</p>
<p>If so, then I have to wait to do my taxes ... if not, then I think I have everything that I need now to do my own 1040EZ. </p>
<p>Thanks in advance for any help you can provide</p>
<p>Thank you! I have to say that everyone on here is absolutely terrific with the help that they offer ... and always so quickly. I think you all need a raise! :)</p>
<p>Don't forget though, that if the amount of scholarships and grants exceeds the amount of qualified tuition, the rest is taxable and reportable on the student's return. If the student claims themselves, the credit is also taken on the student's return.</p>
<p>The 1098T is simple, but the information isn't presented in the obvious way. Maybe this will help: all scholarship money is considered to be money paid by the student. However, only money that goes to pay for tuition is tax free. Other money used for room & board is considered wage income and reported on line 1 of the 1040EZ or line 7 of the 1040A etc. along with other wages even though there is no W2. For this excess scholarship amount, if any, beyond the cost of tuition, also put that down to the left on the dotted line and write SCH next to it.
Whatever other money was paid for tuition, no matter who paid it, is considered to be paid by the student. If the student is a dependent, whoever claims the student is thus considered to be the one who paid it even if they really didn't or if the money was paid from a gift or inheritance. If the student is claimed as a dependent the above "wage" income is put on the parent's return (1040A or 1040 not 1040EZ). Note tuition and fees can be deducted using form 8917. If you don't take the education credit there, you could use instead form 8863 for either (but not both for the same student) the Hope or Lifetime learning credits. The Hope credit is a better deal, but you can only take that for two tax years. The Hope is also for Freshman and Sophomores (exclusive of credit from exams). You can not include expenses for books and supplies on form 8863, but can deduct for amounts necessary for enrollment or attendance (enrollment deposit, student assoc fee).
Note that the 1098T may include amount paid for the first 3 months of 2009 as well as 2008 amounts. Note also that if there are refunds for over payments you'll need to reflect that on the next year's tax return. If you have more than one student dependent you can use any combination of 8917 or 8863 deductions. The instructions for the forms will tell you about exceptions and income limits, filing status, etc. The Hope credit goes up to $1800, the student must be at least half time in a degree program, and can't have a felony drug conviction. The credit may be double for 2008 if the student is going to school in certain midwestern disaster areas (certain counties in 7 states). Form 8917 also has income limits, etc. You may also be able to use Schedule A or even schedule C for higher education expenses, but can't also put them on form 8917 or 8863. If anyone is eligible, don't forget the EIC (Earned Income Credit) as well.</p>
<p>^Right. But the student need not file a return if they are under 65 and single and the non-tuition amount is under $5450 (higher if blind) and there is no other earned or unearned income. This non-tuition amount would be considered wage (earned) income. Right?</p>
<p>If the total income (earned income plus taxed scholarships/grants - we wont go into unearned income - gets too complicated) is enough to have to file a return ($5450 if they can be claimed as a dependent by someone else) then the scholarship money is reported as income on the student's tax return (total from W2s plus scholarships goes in as earned income with the notation SCH$xxx written next to the W2 line). If the student does not have a high enough income to have to file a return then they do not file one (unless they are due a tax refund then, of course, they should). </p>
<p>Either way the income is not reported on their parents return. The student has their own standard deduction of $5450 even if they are claimed as a dependent by their parents, making their earned income up to $5450 not taxable (as long as there is no unearned income in the picture).</p>