<p>According to the IRS posting below - books, supplies and equipment help reduce taxable scholarships. If this is true then why do schools only report tuition and fees? Does anybody in congress read what is already law before adding additional laws covering the same material causing more confusion for the tax payer? If a school is “not for profit” than why would any of the scholarship money received be taxble to the student?</p>
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<p>How in the world would you expect a college to be able to report the cost of the student’s books, supplies and equipment? Those can be purchased anywhere - the college does not bill for them. Colleges can only report what they bill for (tuition and fees)!</p>
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They are not reported on a W-2 or a 1099 and there is no withholding, but they ARE reported on the 1098-T.</p>
<p>I don’t expect them to know. I am citing the differences in IRS reporting that makes it difficult for people to interpret. the 1098-T form does not mention that other expenses, beside tuition and fees, may be allowable in calculating taxable scholarships and it is confusing and difficult to know what is correct because of the inconsistancies.</p>
<p>I completely agree that it’s confusing, but the 1098-T is only a form used to report numbers, not to give instructions on what may or may not be allowable in calculating taxability of scholarships. Those instructions are found in Publication 970.</p>
<p>I spoke earlier with my child’s student receivable office. I was told that the school would not be sending any documents to the IRS because we were not getting a 1098. I asked if anything would be sent to the IRS and was told “no”. I asked to have the financial aid breakdown and was told that $35,000 was for qualified expenses and $48,000 was total scholarship. When I asked if this means that I have to report $13,000 as income the answer I received was “I don’t know anything about that”. I assume that this amount must be reported but before I pay a $900.00 tax bill to the IRS I’d like to make sure that I’m not missing anything. My child worked during the summer and because of being a student her boss did not take federal taxes out thinking that it would all be refunded so the tax liability is $3,000 on summer earnings as well, hence a large tax payment due (I think). </p>
<p>If this is the case can we just report the fall semester and the next calendar year report spring and fall (child is a current freshman)? Or do we have to report the funds for the year that they were dispersed? Funds were dispersed in December for Spring semester.</p>
<p>This is so confusing to me, any help would be much appreciated.</p>
<p>According to the IRS, most schools are required to issue Form 1098-T (see 2009 Instructions Form 1098-E & T, page 2 <a href=“http://www.irs.gov/pub/irs-pdf/i1098et_09.pdf[/url]”>http://www.irs.gov/pub/irs-pdf/i1098et_09.pdf</a>). I know that some schools are under the impression that they do not have to issue such a form, but they are slowly finding out how wrong they are.</p>
<p>I would highly recommend anyone with the types of questions posted in this thread find a qualified tax professional to get answers. Just as with financial aid, federal taxes are not black and white and sometimes require an examination of the entire picture to get a completely accurate answer. If you cannot afford to hire a tax professional, the IRS will usually provide free advice and a better understanding of the tax codes.</p>
<p>Infinity, I am with Nikkiil on this. I was trying to DIY and gave up and shipped the 1098 and all the receipts my son kept of books, software, computer and musical equipment (all included in his FA COA) off to the accountant. I don’t even feel qualified to guestimate for fafsa. But I believe if you have a differential of $13k and no other qualifying expense against it you may well indeed need to pay tax on it.</p>