Scholarship and wages for dependent student

Simple answer: $14394.

Report the W-2 income at the W-2 screen and the 1099-Misc at the 1099-Misc screen.

In TurboTax (TT), enter at:
- Federal Taxes tab (Personal in  Home & Business)

 - Wages & Income

Scroll down to:

  - Wages and Salaries

   - 1099-Misc and Other Common Income

      -Income from Form 1099-Misc

For the scholarship income, In TurboTax (TT), enter at:

Federal Taxes Tab (Personal for H&B version)

Deductions & Credits  (not income)

-Scroll down to:

--Education

  --Education Expenses

She should normally only need to enter her 1098-T. The taxable amount will be the difference between box 5 and box 1.  If the taxable amount is something different, you can use a work around: enter the taxable amount in box 5 and 0 in box 1. 

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Be advised there is a tax “loophole” available. The student reports all his scholarship, up to the amount needed to claim the American opportunity credit, as income on his return. That way, the parents  (or himself, if he is not a dependent) can claim the tuition credit on their return. They can do this because that much tuition was no longer paid by "tax free" scholarship.  You cannot do this if the school’s billing statement specifically shows the scholarships being applied to tuition or if the conditions of the grant are that it be used to pay for qualified expenses.

Using an example: Student has $10,000 in box 5 of the 1098-T and $8000 in box 1. At first glance he/she has $2000 of taxable income and nobody can claim the American opportunity credit. But if she reports $6000 as income on her return, the parents can claim $4000 of qualified expenses on their return.

If the three basic types of income you mentioed (earned income, self-employment income, and scholarship income) all of those sources are *REPORTABLE* income. That does not mean it's all taxable. But it is all reportable on a tax return. W-2 income is reported in the Personal Income section where the program specifically asks for W-2 income. 1099-MISC income (assuming the income is reported in box 3) is reported on SCH C as a physical part of the 1040 tax return of the person who owns the business that received that 1099-MISC income.

As to whose tax return the scholarship income gets reported on, there are a number of deciding factors on that. Normally, if the student was an undergraduate during the tax year, the parents qualify to claim the student as a dependent on the parent's tax return. (Doesn't matter if the student earned a million dollars either.)  Then its the parent's that report all scholarships and grants on their tax return and the parents get all the education credits.