Can anyone confirm these tax-related thoughts? (Scholarship related)

[1bassoon]

I *think* TurboTax is misleading me, so I just want to be sure on something . . . . .

 

DD20 received 24K in scholarships/grants. Her total eligible education expenses (as billed by the uni) are 24,800.

 

The 24K are considered tax-exempt, right? I think I put my figures in the wrong box on Turbo. . . . it wants to tell me that it's considered income. BUT - that's only if the scholarships/grants EXCEED her allowable expenses, yes?

 

Next year I'm just hiring an accountant. Between 4 small businesses and dd's college stuff, I am just DONE with this.

[Barbara H]

The short answer is usually the portion for tuition, fees and books is not taxable but the portion for room and board or stipend is taxable. This article explains it well and links up to the IRS info on the subject. http://www.finaid.org/scholarships/taxability.phtml

[QueenCat]

The short answer is usually the portion for tuition, fees and books is not taxable but the portion for room and board or stipend is taxable. This article explains it well and links up to the IRS info on the subject. http://www.finaid.or...axability.phtml

 

This is how I understand it too. I use H&R Block's software, and it tells you exactly what to put in the boxes, using the form sent to you by the college. The form list scholarships paid and tuition/fees paid. College kid keeps book records. Scholarship money used for other purposes (room, board, travel, etc) is not exempt from taxes.

[Kathy in Richmond]

I'm going through this right now with dd's taxes. The portion of her scholarship grants not used for tuition and fees is taxable on her return. You should have received a Form 1098T from the college which will help you fill out the IRS paperwork.

[1bassoon]

That's the thing - I did get a 1098 form, and filled it in, but then Turbo told me that it was taxable - which is clearly NOT the case.

I'm pretty much over Turbo at this point. :glare:

[Kathy in Richmond]

That's the thing - I did get a 1098 form, and filled it in, but then Turbo told me that it was taxable - which is clearly NOT the case.

I'm pretty much over Turbo at this point. :glare:

 

You're not the first person I've heard that from wrt 1098s and Turbo Tax this year.

Ick. I've already spent $$ on Turbo tax myself, but I haven't got to that particular form yet.

[QueenCat]

That's the thing - I did get a 1098 form, and filled it in, but then Turbo told me that it was taxable - which is clearly NOT the case.

I'm pretty much over Turbo at this point. :glare:

 

I'm confused. You filled in the 1098? That should have been filled in by the school. Or do you mean you used the info from it to fill in the tax forms?

[1bassoon]

 

I'm confused. You filled in the 1098? That should have been filled in by the school. Or do you mean you used the info from it to fill in the tax forms?

 

 

I used the info from it to fill in the tax forms, and Turbo STILL tells me that it's income. BUT it counts for the American Opportunity Credit (we have a very, very low income).

[Storm Bay]

The short answer is usually the portion for tuition, fees and books is not taxable but the portion for room and board or stipend is taxable. This article explains it well and links up to the IRS info on the subject. http://www.finaid.or...axability.phtml

 

Wow, I had no idea of this. That means that dd, who has never had a job, will need to file 2013 taxes if she starts college in Sept with a scholarship that includes room and board. Yikes. I hope we can afford an accountant, too, as we already deal with 2 self-employed adults on our form.