Taxes and kids in college

[Thrif-t]

My daughter is a freshman who has a scholarship that equals cost of tuition, but we still pay room and board. So this little ditty got me $2500 from the American Opportunity Credit:

Coordination with Pell grants and other scholarships.
You may be able to increase your American opportunity
credit when the student (you, your spouse, or
your dependent) includes certain scholarships or fellowship
grants in the student's gross income. Your credit may
increase only if the amount of the student's qualified education
expenses minus the total amount of scholarships
and fellowship grants is less than $4,000. If this situation
applies, consider including some or all of the scholarship
or fellowship grant in the student's income in order to treat
the included amount as paying nonqualified expenses instead
of qualified education expenses. Nonqualified expenses
are expenses such as room and board that aren't
qualified education expenses such as tuition and related
fees.

The rest is found starting on page 14 https://www.irs.gov/pub/irs-pdf/p970.pdf

Luckily she didn't have much of an income so when I added some of her scholarship to her income she was still under the $6300 standard deduction and was able to get her full withholding back.

I worked on her taxes on and off all day yesterday trying to figure out what I had to do. The people at College Confidential are great if you ever get stumped on anything pertaining to college.

[creditcardfree]

I saw that too for including with the student income. We did pay nearly $4K last year (daughter is a sophomore) in tuition, plus books and all the art supplies she needed, so we did get nearly the full amount of the American Opportunity Credit.

[Thrif-t]

^ Well I screwed up, don't know what the heck I was thinking, but I put all her graduation party money into her 529 and paid her tuition out of that. I wasn't even thinking that I couldn't use the 529 $$ to qualify for the AOTC. But I know that so I don't know what my problem was

Her books were 1k and I allocated 3k of her scholarship to her income so we could claim the AOTC. Geez all this is so complicated ya know. My parent's weren't involved in my college career at all. I have 2 kids in college now, I thought I had this all figured out.

And now I gotta start getting involved in my son's stuff. He is going to take college credits in high school so we have some forms to get filled out and he has to apply to the college on their website...its a lot of work with kids today, you gotta educate yourself to get whats coming to you. So many people don't bother and miss out on the credits.

[FLA]

being divorced from a rather difficult person who happens to be the one to claim both kids on his taxes, me getting any share back of what I contribute will likely not happen unless we go to court (which probably costs more than the tax break). Ugh