vjensen71[at]netscape.net (Vick) wrote:

- quote -

You don't ever claim his income on your return. He claims
it on his return. He claims his standard deduction of $4750
to -0- out his income and does not claim himself. You still
claim him as long as he under 24 and still in school. You
put the 1098T on your return.

Missy

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vjensen71[at]netscape.net (Vick) writes:

- quote -

He files his own return, not claiming his personal
exemption. He'll owe no tax, so if no income tax was
withheld, he need not file at all (Federal). The state may
have different requirements.

- quote -

You can use the excess of qualified expenses over
scholarship payments as a basis for the credit.

Phil Marti
Topeka, KS

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vjensen71[at]netscape.net (Vick) wrote:

- quote -

He would file his own return and not claim himself.
However, he doesn't have to file with so little income. If
he had any withholding, he can file to get it back.

If the tuition was paid with tax-free scholarships, then you
can't claim an education credit for it. If the numbers on
the 1098T are correct, you still have an $85 Hope Credit
coming to you (assuming your income isn't too high).

But here's something fun you might be able to do: Did the
scholarship HAVE to go to tuition? Or could it have been
used for any of his college expenses? If it could have been
applied to something other than tuition, you can choose to
allocate the scholarship to other expenses. If you do that,
then your son has to claim the scholarship as income, but
you can then take the Hope Credit on the tuition. Here's an
example: Your son had $2000 in expenses that don't qualify
for tax-free treatment of the scholarship (this can be
anything: room and board, books, transportation, porno,
doesn't matter). He can allocate $2000 of his scholarship
to that, and then claim that $2000 as income on his return.
This is going to add $189 to his federal taxes for the year,
plus maybe something for state. You can pay the additional
taxes for him, since you're going to benefit. Then you only
have to reduce the tuition by the remaining $1782 in
scholarships and you still have $2085 to use for the Hope
Credit, which should save you $1500! This is straight out
of IRS Publication 970 and is totally legal and legitimate
as long as the terms of the scholarship don't restrict it to
tuition.

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Son is 20 and full time college student (2nd year). No
unearned income and he worked part time and earned 4591.96.
I can claim him as a dependent according to the support
rules. Do we show his income on our 1040 or does he file
his own return but not claim himself or ???

Second question, we received a 1098T, box 2 has tuition
3866.56 and box 4 for scholarships is 3781.75. We can't
claim the Hope or life time learning credit can we since
almost all of the tuition billed was covered by
scholarships.

Thanks, I always did our taxes on turbo tax but now I'm
getting confused.

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