Hi - two part question regarding the 1098T - my daughters University billed 2017 tuition in 2016 but it was not paid until 2017. The only amount on the form is in Box #5 for grants. When I click on the link for "what if this not the amount" do I only correct or enter the total amount paid in the grayed-out box, or do I also fill in box #1 and box #2 with the appropriate amounts (both currently blank on my 1098T)?
Second question is I am claiming my daughter as a dependent. She graduated in the spring of 2017 and is required to file a tax return due to her new job. Do we both complete the 1098T section in Turbotax for our respective tax returns - and if so does she make the same corrections as me (so that the grants are not calculated as taxable income)?
1. you only fill in the box under the box 2 amount for the amounts you actually paid to the school for tuition and fees only (include amounts paid with loans), the 1098-T must be entered exactly as received. later in the interview you enter room and board and books.
Do note the IRS is changing the 1098-T reporting to cash basis although they are allowing colleges till 2019 to require this new reporting method.
2. this is complicated as do you actually meet the rules of claiming your child as a dependent? During a transition year it gets very complicated. Only the person claiming the dependent can claim education expenses. your child would report only the excess grant income on their return if you claim them (do note not all grants can be used the same way, some grants are strictly for tuition and fees only and therefore limit how you can use them).
If you are claiming a child over 19, they must be in school for 5 months to be considered a student.
When you’re claiming a dependent who is a child, there are further requirements:
If you cannot claim as a child, then you could claim as a qualifying dependent IF he had made less than $4050, but he made way over that so he cannot be a qualifying dependent either.