<p>Simple question, do i have to do taxes this year? I am a freshman in college with no earned income (though i do recieve a little bit from my dad every once in a while). I used all my grants for schooling and i still have a little left over from my loan, which i’m hanging on to until i decided if i want to do a spring semester class or not (seriously considering it).</p>
<p>I’ve asked both my mom and my grandma (who used to be a loan officer) and they both agree that i don’t because i have no earned income. Furthermore, i went looking and found if i have below $2000 per year, i do not have to do it.</p>
<p>Do you have any unearned income? In other words; interest, dividends, etc? If so, if it is more than $950 then you need to file. Are your grants higher than your qualified tuition and fees? If so, you need to file if it’s more than $5,700 if you have no unearned income. If you have both, it’s complicated. Let me know.</p>
<p>It doesn’t appear OP would have unearned income. OP used all of his grants for schooling and has loans. If he had assets to generate unearned income then it’s not likely he would have loans.</p>
<p>If your grants and scholarships were all used for qualified educations expenses (tuition, fees, required books) then none should be taxable. Any part that was used for non qualified expenses (such as room and board) is taxable income. So if you have any taxable scholarship/grant income you need to look at the amount to see if you need to file.</p>
<p>Oldfort, yes, and a student could end up owing taxes on that $10-20k plus any work study or summer job income. It is a tough place to put a kid who is $0 EFC, not that they should not be incredibly grateful for the funding, but that they may not figure this out until April of the next year when they do and owe their taxes. It would be nice if some one could advise them to do some extra withholding from a summer or work study job so the big tax bill is not a surprise.</p>
<p>Yes, anything over tuition and fees and required books would be taxable income. How much would actually incur taxes would depend on total income (1st $5700 should of earned income should not have any tax. Taxable scholarships are earned income on the tax return).</p>
<p>If a student with EFC=0, has room and board of $15000, would he need to pay tax on around $9000? What about a RA who gets room for free? Would he be required to pay tax on the value of his room? Since a student didn’t do any work to get free room and board, couldn’t that be viewed as a gift rather than income?</p>
You mean as a dependent? Probably. A student under age 24 can be claimed as a dependent by their parent as long as the student do not provide more than 50% of their own support.</p>
<p>So unless the amount is more than $5700, the student does not have to file or do you still have to file but will have no tax liability? Fortunately, D has only one semester of FA for 2009 so she will not have to pay. She will likely have to pay for 2010 though. I think this is something that most people do not understand. If a student who should file does not, does the school catch it when FAFSA is filled out?</p>
<p>She doesn’t have to file if the amount of taxable income (including any other earned income) is less than $5700 (this year). The exception is if she has other unearned income over a certain amount - the filing cut offs are different then.</p>
<p>I don’t know if the school would look out for that or not.</p>
<p>I would never take the chance, but it is obvious that lots of people have no idea that scholarships are taxable, so I think that lots of people are not filing. I just wondered if there was any ramification for that failure - other than what would be revealed in a tax audit.</p>