I want to understand if I need to pay taxes on scholarships used for room and board, as I know these expenses might not be tax-exempt like tuition and fees. I’m curious about how to determine the taxable portion of my scholarship and whether I need to report it to the IRS. Additionally, I’d like to know which forms I should use, such as Form 1098-T, and how to correctly include this information on my tax return. Understanding these details will help me stay compliant with tax laws while managing my education expenses.
Here is information from the IRS: Topic no. 421, Scholarships, fellowship grants, and other grants | Internal Revenue Service.
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Also suggest you review Chapter 1 of IRS Pub 970: 2023 Publication 970
Yes, scholarships used for room and board are considered to be taxable income. However, this is earned income as far as the IRS is concerned, which is a good thing because much more of it can be covered by a dependent’s standard deduction (up to $14,600 in tax year 2024 for a single filer).
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