Right, and OP will need to look at the actual numbers here rather than just assuming the refund is the taxable amount—but in general, if you get a financial aid “refund” it means that all the tuition and stuff has been paid and there was money left over (for room, board, etc which are not qualified).
Yes, that is my situation. Do you have any suggestions for what I should now by chance since my return with only my W2 have already been accepted? Like should I file an amended tax return?
>(including room and board
So here's what you do. Look at 1098-T from your school. Box 1 is qualified expenses. Box 5 is scholarships.
If Box 5 is larger, (it should be because room & board is not qualified expense), then only the portion exceeding is taxble and should be listed as other income on your return.
Also, if the total amount is below standard deduction, you likely won't have any taxes. I do think you should amend to include it though as 1098-t info is sent to IRS
I've used most of my financial aid refund for food and rent. That makes it taxable income right? My scholarship (which comes from the university) is meant to cover my full cost of attendance (including room and board) at my university so I receive whatever can't be applied directly to the school. Just to further clarify, when I lived on campus I received much less money in my bank account because the scholarship paid for the dorm.
Does "qualified ed expenses" include offsite room/board?
Scholarships often cover those expenses, up to a certain amount, but does it necessarily mean that the scholarship that pays for those expenses is also not considered taxable?
> I'm absolutely terrified of being charged with tax fraud.
Fraud implies intent. Trust me, it's never happening to a self-filing college student who doesn't realize scholarship money can be taxable. As others have said, it's generally not as long as it goes to qualified education expenses.
Also, if you're a dependent, it'd be on your parents return and not yours. I do taxes for tons of parents and their college students, the tuition/scholarship/expenses stuff almost always goes on the parents return because they're the ones who can get mileage out of the credits.
Accidentally underpaid taxes? Straight to jail.
In all seriousness OP this guy is right, the chances of you being charged with tax fraud are zero.
There’s a big difference in the IRS’s eyes between a college kid who genuinely didn’t realize they had to pay something and someone who willfully underreported thousands of dollars of income for multiple years (those are the people who are generally worth putting time and manpower into investigating and prosecuting)
People make mistakes on their taxes all the time, if everyone who ever made a mistake went to prison for tax fraud we would have no one left to pay taxes lol.
> the tuition/scholarship/expenses stuff almost always goes on the parents return because they're the ones who can get mileage out of the credits.
Education *credits* go on the parent's return in many cases, but scholarship *income* is always on the student's return (if it is taxable, and if the student has a filing requirement).
The only dependent income that can be reported on a parent's return are interest and dividends, via Form 8814. There is no way to report taxable scholarship income on the parent's return.
I'm in a HCOL area and our income disqualifies us from any tax break other than what you get with a 529 plan. My son starts college this year and plans on working part time for the experience. Can he get better tax breaks if I don't claim him as a dependent? I believe I only get $500 for claiming him anyway.
The simplified answer is that he can get a credit, but it would be nonrefundable so may not be useful. It’s only partially refundable if you couldn’t be claimed as a dependent.
If the scholarship income is taxable, it is always taxable to the student. The parents get the credits if they claim the student as a dependent. But in this case, the student should apply for the credits if he provided more than half of his own support since his parents did not claim him.
Yeah, the IRS actively dislikes when people file MFS and therefore disallows multiple credits when you file MFS to dissuade you from doing so, one of which is the student loan interest deduction.
If it wasn't used for college, that should also be considered fraud too, correct? Grants and scholarships received from state/federal agencies are supposed to specifically used for school expenses.
I doubt that, medical expenses are also included in grants and scholarships but it’s not school related, so they never really specified what use you make out of the scholarships but they should be supporting the college journey (aka food, room, medical expenses, necessary expensive networking meals, clothes, digital devices, grocery, etc) even tutor service would also count but it’s not necessarily school related as it’s never encouraged to buy tutor services, so it’s very hard to say the aids were not used for “school related” purposes
i don’t believe federal work study counts as a scholarship, it’s federal assistance akin to a grant if i’m correct, and it’s “earned” differently. you have to work to earn the federal work study (it’s essentially the govt covering the tab for the college for student wages) and that’s already recorded in your w-2 and taken care of when filing your taxes normally.
Does this apply if you get state scholarships? My grants are $5000 over what my tuition was, but I never saw a dime of the remaining money because there was never a disbursement from the school.
Scholarships received in excess of education expenses are taxable. However, standard deduction is $12,950. So, you have wiggle room with your W-2 before you had any taxable income.
With regards to filing, who filed first, you or your parents? The first return will be accepted and the second will be rejected since you will be in the system under the first return. If your parent filed first you can ask them to either amend or give you back your withholding a that would have been refunded to you.
My parents filed first and it was accepted and everything. I filed about a few weeks ago and my return was accepted. I also have already gotten my tax refund. They aren't going to amend their return.
>give you back your withholding a that would have been refunded to you.
\^ I'm so sorry could you explain what this means?
With the exception of certain tax credits, your refund is made up of your tax withholdings.
If they did claim you as a dependent, you or your parents will get a notice to pay your refund back.
Did you look at your 1098-T? Report those numbers here.
Now, did you use any of that $12,500 to buy books or supplies required for your classes? That amount is considered a qualified expenses just like the amount that went to tuition.
Sometimes there can be ways to claim more income but pay less tax by claiming a credit. But this depends on the specifics of your scholarship and is tricky to understand.
The worst case is just that you must pay the tax. They will probably even waive any penalties though will probably charge interest.
You can read all about taxes and scholarships in the IRS Publication 970.
I was just looking into that myself! You do have to include the income on your tax return, I think, but it is TAX-FREE as long as it is used for Tuition, fees, books, and other related expenses for college, including living expenses.
No, living expenses are not tax free. Any scholarship money used for living expenses i.e. room and board, is taxable. See [IRS Topic 421](https://www.irs.gov/taxtopics/tc421).
[удалено]
Right, and OP will need to look at the actual numbers here rather than just assuming the refund is the taxable amount—but in general, if you get a financial aid “refund” it means that all the tuition and stuff has been paid and there was money left over (for room, board, etc which are not qualified).
Yes, that is my situation. Do you have any suggestions for what I should now by chance since my return with only my W2 have already been accepted? Like should I file an amended tax return?
>(including room and board So here's what you do. Look at 1098-T from your school. Box 1 is qualified expenses. Box 5 is scholarships. If Box 5 is larger, (it should be because room & board is not qualified expense), then only the portion exceeding is taxble and should be listed as other income on your return. Also, if the total amount is below standard deduction, you likely won't have any taxes. I do think you should amend to include it though as 1098-t info is sent to IRS
I've used most of my financial aid refund for food and rent. That makes it taxable income right? My scholarship (which comes from the university) is meant to cover my full cost of attendance (including room and board) at my university so I receive whatever can't be applied directly to the school. Just to further clarify, when I lived on campus I received much less money in my bank account because the scholarship paid for the dorm.
Does "qualified ed expenses" include offsite room/board? Scholarships often cover those expenses, up to a certain amount, but does it necessarily mean that the scholarship that pays for those expenses is also not considered taxable?
You must include in gross income: Amounts used for incidental expenses, such as room and board, travel, and optional equipment.
> I'm absolutely terrified of being charged with tax fraud. Fraud implies intent. Trust me, it's never happening to a self-filing college student who doesn't realize scholarship money can be taxable. As others have said, it's generally not as long as it goes to qualified education expenses. Also, if you're a dependent, it'd be on your parents return and not yours. I do taxes for tons of parents and their college students, the tuition/scholarship/expenses stuff almost always goes on the parents return because they're the ones who can get mileage out of the credits.
Accidentally underpaid taxes? Straight to jail. In all seriousness OP this guy is right, the chances of you being charged with tax fraud are zero. There’s a big difference in the IRS’s eyes between a college kid who genuinely didn’t realize they had to pay something and someone who willfully underreported thousands of dollars of income for multiple years (those are the people who are generally worth putting time and manpower into investigating and prosecuting) People make mistakes on their taxes all the time, if everyone who ever made a mistake went to prison for tax fraud we would have no one left to pay taxes lol.
> the tuition/scholarship/expenses stuff almost always goes on the parents return because they're the ones who can get mileage out of the credits. Education *credits* go on the parent's return in many cases, but scholarship *income* is always on the student's return (if it is taxable, and if the student has a filing requirement). The only dependent income that can be reported on a parent's return are interest and dividends, via Form 8814. There is no way to report taxable scholarship income on the parent's return.
I'm in a HCOL area and our income disqualifies us from any tax break other than what you get with a 529 plan. My son starts college this year and plans on working part time for the experience. Can he get better tax breaks if I don't claim him as a dependent? I believe I only get $500 for claiming him anyway.
The simplified answer is that he can get a credit, but it would be nonrefundable so may not be useful. It’s only partially refundable if you couldn’t be claimed as a dependent.
If the scholarship income is taxable, it is always taxable to the student. The parents get the credits if they claim the student as a dependent. But in this case, the student should apply for the credits if he provided more than half of his own support since his parents did not claim him.
[удалено]
Yeah, the IRS actively dislikes when people file MFS and therefore disallows multiple credits when you file MFS to dissuade you from doing so, one of which is the student loan interest deduction.
Unless you didn’t use them for college. As long as you did it’s not taxable.
Any amounts used for room and board are taxible if it is not a requirement to be boarded a student.
If it wasn't used for college, that should also be considered fraud too, correct? Grants and scholarships received from state/federal agencies are supposed to specifically used for school expenses.
I doubt that, medical expenses are also included in grants and scholarships but it’s not school related, so they never really specified what use you make out of the scholarships but they should be supporting the college journey (aka food, room, medical expenses, necessary expensive networking meals, clothes, digital devices, grocery, etc) even tutor service would also count but it’s not necessarily school related as it’s never encouraged to buy tutor services, so it’s very hard to say the aids were not used for “school related” purposes
i don’t believe federal work study counts as a scholarship, it’s federal assistance akin to a grant if i’m correct, and it’s “earned” differently. you have to work to earn the federal work study (it’s essentially the govt covering the tab for the college for student wages) and that’s already recorded in your w-2 and taken care of when filing your taxes normally.
Yep, sounds like OP already accounted for this
Does this apply if you get state scholarships? My grants are $5000 over what my tuition was, but I never saw a dime of the remaining money because there was never a disbursement from the school.
If you never got a refund from the school you do not have income.
Honestly you should contact your university they should have resources for your situation.
the university is going to say “we don’t provide tax advice, talk to a tax expert”
Fund an IRA fully!
Scholarships received in excess of education expenses are taxable. However, standard deduction is $12,950. So, you have wiggle room with your W-2 before you had any taxable income. With regards to filing, who filed first, you or your parents? The first return will be accepted and the second will be rejected since you will be in the system under the first return. If your parent filed first you can ask them to either amend or give you back your withholding a that would have been refunded to you.
My parents filed first and it was accepted and everything. I filed about a few weeks ago and my return was accepted. I also have already gotten my tax refund. They aren't going to amend their return. >give you back your withholding a that would have been refunded to you. \^ I'm so sorry could you explain what this means?
With the exception of certain tax credits, your refund is made up of your tax withholdings. If they did claim you as a dependent, you or your parents will get a notice to pay your refund back.
It depends on how you use the money. You won’t be charged with tax fraud unless you were purposely trying to deceive the government. You need intent.
Did you look at your 1098-T? Report those numbers here. Now, did you use any of that $12,500 to buy books or supplies required for your classes? That amount is considered a qualified expenses just like the amount that went to tuition. Sometimes there can be ways to claim more income but pay less tax by claiming a credit. But this depends on the specifics of your scholarship and is tricky to understand. The worst case is just that you must pay the tax. They will probably even waive any penalties though will probably charge interest. You can read all about taxes and scholarships in the IRS Publication 970.
I was just looking into that myself! You do have to include the income on your tax return, I think, but it is TAX-FREE as long as it is used for Tuition, fees, books, and other related expenses for college, including living expenses.
No, living expenses are not tax free. Any scholarship money used for living expenses i.e. room and board, is taxable. See [IRS Topic 421](https://www.irs.gov/taxtopics/tc421).