<p>On the FAFSA there’s an entry field that seems rather vague. It says to put in scholarships and other stuff reported to the IRS, but I don’t know exactly what to put in here as I haven’t reported anything to the IRS. I am classified as a dependent and will not file my taxes. Am I basically supposed to put in the field the sum total of ALL of my scholarships, cal grants, pell grants, etc. in there? Also, if my college sends electronic fund transfers (EFT Refunds from scholarship aid; basically everything that is left over from the aid is deposited into my account, it was ~$1100 for Fall 2007 Semester), where do I put this information (which box?)? If I already submitted my FAFSA, would it be perfectly fine if I added this information on the correction (I submitted it first and then realized that I wasn’t supposed to leave the field blank)?</p>
<p>In the mail I received a letter from UC Berkeley stating “Information for Determining Federal Tax Benefits for Higher Education Expenses.” On the paper it said:</p>
<hr>
<p>“Tax year 2007 Amounts”
Part 1: Payments Received for Tuition and Related Expenses:
University Registration Fees $393
Educational Fees $2925
Regular Session Fees $205.75
Qualified Expenses Total for Jan 1 - Dec. 31, 2007: $3523.75</p>
<p>Part 2: Scholarships or Grants:
Grants and Scholarships: $8913</p>
<h2>Total for Jan 1 - Dec 31, 2007</h2>
<p>Am I supposed to put this information somewhere on the FAFSA if I am a dependent?</p>
<p>Any scholarships/grants in excess of tuition/fees/required books are taxable and have to be reported on a tax return as income. Looking at your numbers you may be required to do a tax return especially if you have any other income (you are certainly close to the income cut off but I can’t remember exactly what it is). You can still do a tax return even if you are claimed as a dependent by your parents. You would get a standardized deduction but not the personal exemption. IRS form 970 gives you the rules about what part of a scholarship is taxable.</p>
<p>On FAFSA the taxable portion of scholarships/grants is included in your AGI from your tax return. You show the amount included on the worksheet so that it will be deducted from your AGI so as not to negatively affect your financial aid. ie the FAFSA formula will exclude the taxable scholarships when calculating your EFC.</p>
<p>You do not have to show the refunded amount seperately - it is the total scholarships/grants less tuition/fees/books that must be reported on taxes and FAFSA.</p>
<p>Rules for when a dependent must file a tax return are in IRS publication 929</p>
<p>The scholarships/grants in excess of tuition/fees/required books, if I’m understanding you correctly, would be the EFT Refund, right (Which was about ~1100 lass semester)? So, I have to report this somewhere on the FAFSA? Where? </p>
<p>What’s this AGI form (I don’t recall seeing such a thing when filling out the FAFSA)? I don’t have a tax return, so I’m a little confused.</p>
The point is you may have to do a tax return. If your earned income is $5350 or over you have to do a tax return even if you are claimed as a dependent.Taxable scholarships/grants are considered earned income for tax purposes.</p>
<p>
</p>
<p>No it is not the refund. Other items are charged to your bursar account such as room and board. Scholarship/grant money used to pay for room and board is taxable.</p>
<p>From the numbers you showed on your original post:
Qualified Expenses Total for Jan 1 - Dec. 31, 2007: $3523.75
Grants and Scholarships: $8913</p>
<p>Your scholarships/grants totaled $8913 - your qualified expenses were $3523.75. The difference between the two is the taxable part of your scholarships and grants.
8913-3523.75 = $5389. </p>
<p>swimcatsmom explained it well-- reread her post.</p>
<p>Bottom lines:</p>
<ol>
<li><p>$8913 - $3523 = $5390 taxable income from the Grant/scholarship funds.</p>
<ol>
<li>You’re probably required to file a tax return-- check the IRS site.</li>
<li>Regardless of whether you’re required to file, the $5930 gets reported on FAFSA (along with any other income) as part of your Adjusted Gross Income. Then you also report the $5930 on one of the Worksheets, and the formula subtracts if from your AGI so that it won’t adversely affect your financial aid next year.</li>
<li>“EFT Refund” isn’t a phrase that’s used by FAFSA or by the IRS-- so don’t put that figure anywhere.</li>
</ol></li>
</ol>
<p>Books required for class can be used to reduce the taxable portion of scholarships/grants so you may squeak in under the $5350 limit if you have no other earned or unearned income. If you have any other income you may have to do a tax return.</p>
<p>I don’t have any other income. How would I “use” books to reduce the taxable portion of scholarships/grants (where would I put in how much I’ve spent on books on the FAFSA?)? I’ve spent more than $40 on books, so I shouldn’t have to file a tax return, correct?</p>
<p>page 5. Keep that in your records somewhere along with the 1098-t (the form you got from your school) so if the taxman ever asks you have a record of why you did not have to report it. Attach copies of receipts for books.</p>
<p>Oh and you need to talk to our parents and make sure they are not using your tuition/fees to claim any sort of tax credit (hope tax credit/tuition & fees deduction etc). The tuition/fees can only be used as a ‘qualifying cost’ once. That is you can use it to reduce your taxable scholarships/grants or they can use it for a tax credit - not both.</p>
<p>Thanks for the help. I was just wondering where do I put this information (which boxes?)? I see a box for AGI:</p>
<ol>
<li>What was your (and your spouse’s) adjusted gross income for 2007? </li>
</ol>
<p>But where would I put the $5390 on the FAFSA and where would I put the deductions from buying books (I have the receipts that would put the $5390 below the $5350 limit). Where would I put the information I mentioned in the above posts/the cost of books; would I put it in any of the following fields:</p>
<p>WB12. Money received, or paid on the student’s behalf (e.g., bills), not reported elsewhere on this form.</p>
<p>WC4. Student grant and scholarship aid reported to the IRS as part of your (and your spouse’s) adjusted gross income. Includes AmeriCorps benefits (awards, living allowances, and interest accrual payments), as well as grant or scholarship portions of fellowships and assistantships.</p>
<p>So, for AGI I put 8913? Where would I put the 3523, and the cost of books to put the $5390 below the limit? What about WB12 (Would the cost of the dorm and stuff go in there?)?</p>
<p>I’m just a little confused as what the $5390 will end up representing to the FAFSA people (It’s not like I had this money pocketed or put in my bank account; it all went to paying for dorm costs/books). I currently have all 3 of the above fields blank/set to 0. I’m guessing I put 8913 for AGI and WC4, but where do I put the $3523 and the cost of the books? I was wondering which field in the worksheet was referred to here:</p>
<ol>
<li>Regardless of whether you’re required to file, the $5930 gets reported on FAFSA (along with any other income) as part of your Adjusted Gross Income. Then you also report the $5930 on one of the Worksheets, and the formula subtracts if from your AGI so that it won’t adversely affect your financial aid next year.</li>
</ol>
<p>I apologize for all the questions and I really appreciate your taking the time to help me.</p>
<p>Put the $5930 in the student’s worksheet C, question #42, under Student grants and other awards. “Report any student grant and scholarship aid reported to the IRS in your AGI.”</p>
<p>sblake - I am not sure he puts it anywhere. He is not doing a tax return so has no AGI. If there is no AGI then no scholarship/grant is reported to the IRS so it should not be shown on the worksheet. </p>
<p>My daughter does a tax return so I know how it works when you have a tax return. I don’t think you report it at all if it is not taxable.</p>
<p>The worksheet for reporting untaxed income specifically says not to report untaxed financial aid.</p>
<p>Doesn’t matter if he’s filing taxes or not. The $5930 is taxable income, so it gets included in Q35 as part of his AGI (FAFSA requires him to calculate as if he were filing taxes, using IRS guidelines and instructions). Then it gets deducted out in Worksheet C.</p>
<p>Works out the same either way, I suppose, unless there’s a 20K or 50K threshold involved for SNT or Auto Zero EFC.</p>
<p>sblake7 - So I should put $5390 under WC4 that I listed in my previous post? What should I put for my AGI then? These are all supposed to cancel out and not effect my EFC in the end, right?</p>
<p>Yeah, they cancel out. So if you add the $5390 to whatever other income you have to get your AGI (Q35), be sure to list the $5390 on Worksheet C, so the formula will take it away from your AGI before it calculates your EFC. I think that’s the correct way to do it, whether you’re required to file taxes or not.</p>
<p>The thinking is that a student shouldn’t be penalized aid-wise next year for this years financial aid grants.</p>
<p>On the other hand, if you don’t include it in your AGI (Q35), don’t include it on Worksheet C. I think that’s what swimcatsmom is suggesting. It should work out to the same EFC either way.</p>
<p>Oh ok sblake - that is what I was confused about. </p>
<p>In that case OP you have calculated the portion of your scholarship that is taxable income. (It is the $5390 less the cost of books). If that is your only income you show that amount as the AGI. Then you show the same amount on worksheet C under scholarships included in AGI. </p>
<p>The EFC formula will deduct the worksheet C figure from the AGI so the net effect to your EFC will be 0. (probably sounds a bit pointless in your case as the two are equal but in most cases, where there is other income, they will not be. The reason behind it is that while the income may be taxable and therefore included in your AGI it is not supossed to affect your financial aid so is deducted out again via worksheet C)</p>
<p>You do not put the total scholarship/grant amount anywhere on FAFSA. All you need to be concerned about is the net figure you have calculated - total scholarships and grants less qualified expenses (tuition/fees/books) = taxable scholarships/grants. It is this taxable scholarships/grants number you report - nothing else.</p>
<p>I thought that books (since they can be purchased from other sources) were not a qualifed expense and couldn’t be included with the tuition part for tax purposes. DD has to pay $500 in income tax for her scholarship money - which really stinks.</p>
<p>cap - the IRS 970 is very confusing as what is considered a ‘qualifying expense’ varies according to which education tax benefit you are looking at. </p>
<p>My understanding is that:
For calculating taxable scholarships/grants books are allowed. (if you look at that section of the publication there is no specification - is that a word? - that books must be purchased through the school - just that they are required in the class).
For qualifying expenses for 529 withdrawals books (and room and board) are allowed.
For Hope, lifetime and tuition/fees deductions books are not allowed if they can be bought from other sources.</p>
<p>I am not a tax expert but that is my understanding of the very wordy and confusing rules.</p>
<p>from the IRS qualified expenses for taxable scholarships/grants
</p>
<p>From the IRS qualified expenses for hope/lifetime/tuition&fees deduction
</p>
<p>and for good measure qualified expenses for 529 account withdrawals
</p>
<p>As you can see the definition of qualified education expenses varies according to the tax exemption being taken. As the rule for hope etc specifically states the books must be paid to the institute and the rule for taxable scholarships does not state this I am reading that as being able to take the books as a deduction for scholarships/grants. Did not use books for the hope credit for my son. Did use them for his 529 withdrawal.</p>