![]() Effect of taxable amount of Social Security due to change in income and it's ripple effect with other items.Optimizer interactions with several items have not (yet) been included - some may never be. Straight-forward but the change was rescinded for tax year 2020.Ģ0 may be amended to use the original method (but is OUT OF SCOPE).Ĭlicking the optimize button below the results modifies the amount of scholarship amount to be made taxable, In 2018, that complexity wasĪlleviated by using the Trust tax rates when the Kiddie Tax threshhold was crossed, making the calculation more The results are the estimated amount of change to the taxpayer's refund (or tax owed) for each optionįor years other than 20, the optimizer prevents activating the "Kiddie Tax"ĭue to the complexity and interactions with the parent's tax return. Randomly changing the amounts in the entered fields may result in nonsensical results in the otherĬolumns because the fields used rely on certain TaxSlayer calculations. (that would require duplicating the entire return). TaxSlayer and does not account for all factors as the manual comparison does To make data entry reasonable, it must be used with The Optimizer tab takes a bit more data entry and shows a detailed comparison for each optionĪnd it's effect on various other credits. Of course, you have to adjust the taxable amount in the Funding Sources tab manually too (ugh). Of the education options using TaxSlayer and a place to record and compare the results.īecause it uses TaxSlayer to do the calculations, all the taxpayer's information is used and the calculation The Manual Comparison tab gives instructions on how to conduct a "what if" for each The bottom two rows show the amounts that can be used in the taxpayer's returnĪnd the amount of unused scholarship funds that are taxable. Taxable income which may be offset by the use of the credit). That covers expenses over that allowed for the particular credit (usually results in additional The qualified expenses (often results in no additional taxable income) or to use only the amount Lifetime Learning credit, or for Tuition and Fees adjustment.Ī check-mark to the left of each expense catagory indicates funds that can be used for theįunding amounts in the Funding Sources tab (scholarship amounts used will be taxable).Īn option in the qualified expenses row, allows you to use all available funds to be spent on The columns to the right will show what expenses qualify for the American Opportunity Credit, Then enter education expenses in the Expense Information tab. Unrestricted scholarships can be used for living expenses if the student is willing to make those amounts taxable. Which also differ depending on the credit type. May vary with the source and may also be different than the "qualified expenses" for tax credits Note that "qualified expenses" for using a funding source tax-free So that it will be taken into account for these limits. If the dependent has any income, enter it in the dependent's tax form in the Optimizer tab Similarly, a dependent relative student's taxable income is limited to that which would no longer If a dependent child student falls within the criteria to trigger a kiddie tax, the amount made taxable is limited This field is also used by the Optimizer. ![]() Or other benefits and result in a higher refund (or lower amount owed). One input option allows you to make a part of the scholarship taxable which may increase education Tuition and fees, enter the amounts in the Funding Sources tab. Qualified Tuition Plans (529 Plans), Early IRA distributions or Savings Bonds used for If the student is receiving scholarship funds or financial help from Coverdell ESA, This will help determine eligibility for the various education credit options and information needed ![]() Enter basic filing information and facts about the taxpayer and student in the Taxpayer Information tab.
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