What can i deduct from this attached picture from my daughter's college.

In TurboTax (TT), enter (on the parent's return) at:

Federal Taxes Tab (Personal for H&B version)

Deductions & Credits

-Scroll down to:

--Education

  --Education Expenses and Scholarships

What numbers are on the 1098-T (box 1 and box 5)? If you haven't received one yet, check her online account at the school. 

$2722 is not enough tuition paid, to claim the full $2500 American Opportunity credit (AOC).  It takes $4000 of tuition.  But, there is a tax “loop hole” available. The student reports some of his scholarship, up to the amount needed to claim the American Opportunity Credit (AOC), 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 $5632 in box 5 of the 1098-T and $8354 in box 1. At first glance the parents can only claim $2722 for the American opportunity credit. But if she reports $1278 of the scholarship as income on her return, the parents can claim $4000 of qualified expenses on their return.

Books and computers are also qualifying expenses for the AOC. So, extending the example, the student had another $1000 in expenses for those course materials, paid out of pocket, she would only need to report $278 of taxable scholarship income, instead of $1278.

First I suggest going onto your child's school account to download a form 1098T (Tuition Statement).  The information you have here is pretty much the same but the Form 1098T information can be entered onto TurboTax in a step-by-step method.

Once you get that form use these steps to enter onto TurboTax.

Here's how to enter your 1098-T in TurboTax:

1. Open or continue your return
2. Go to Form 1098-T
3. If you land on Your Education Expenses Summary:
   • Select Edit next to the name of the student you're entering a 1098-T for (select Add A Student if the student isn't listed)
   • On the next screen, select Edit next to the school name. You can enter the info from your 1098-T on the following screen
4. If you land on Do you want to enter your higher education expenses?:
   • Answer Yes
   • Answer Yes to Did you get a 1098-T for this year? and Continue
   • On the next screen, you can choose how you'd like to add your 1098-T. You can upload a digital copy from your computer or type it in yourself. Select which option you'd like and Continue
5. If you need to enter a 1098-T for someone else, continue through the screens until you get to the Your Education Expenses Summary screen, then select Add A Student

Use this link for additional information and tips.

Qualified Education Expenses

The IRS does not consider every educational expense a qualified one, so it's important to get that information from your 1098-T. It will also help you calculate some of the tax benefits that the IRS offers, like the American Opportunity Tax Credit or the Lifetime Learning Credit.