<p>Daughter is a freshman in college and now, filing a tax return for her scholarships is new to me. We are lower income so she did receive a Pell Grant. All fees are covered in full with her academic scholarships and grants for lower income status. The 1098T is the full amount recieved first semester for everything....tuition, room, board, books, travel expense. What exactly is taxable and what isn't? And how are these figures plugged into a tax return? She has no income to report for the year 2007.</p>
<p>Also, our family income has improved greatly from 2006 to 2007. What is the income limit on Pell Grants? </p>
<p>I don't know about the Pell Grants. But you can download the IRS publication 970 and that has a lot of info about the 1098-T form. The only money that is considered by the IRS is tuition-- not room, board, insurance, books (for the most part, not entirely), transportation. The 970 publication explains the ins and outs of the tax code. In the end, it's a lot of hoopla about a pretty simple calculation.</p>
<p>The EFC limit for Pell grants is 4041 which, oddly, is down a little from 2007-2008. Can't say what what that would be for income as EFC depends on a combination of parent income & assets and student income and assets.</p>
<p>You take the total scholarships and grants and deduct the tuition, fees and books (must be required for the class) from that to get the taxable part of the scholarships and grants. It is included with wages and tips on the tax return and you write "sch $xxx in the space after the words "wages salaries tips etc. Attach form(s) W2" . I think if her total earnings including the taxable part of scholarships/grants does not exceed the amount that would cause her to be required to file a tax return (she does not have to file but double check that as I am not a tax expert.</p>
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<p>The only money that is considered by the IRS is tuition-- not room, board, insurance, books (for the most part, not entirely), transportation.>></p>
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<p>This sentence is confusing to me. I'm pretty sure that the IRS taxes scholarships that are for thing OTHER THAN tuition, fees, books. In other words, scholarships that cover room, board and personal expenses are considered taxable income.</p>
<p>One other question.......she recieved several outside scholarships, other than from the university. The 1098T was from her school. Should the other foundations have rendered her a 1098T? </p>
<p>FAFSA the first time out was much easier than the second year and now taxes too!</p>
<p>Atheltic scholarships have to meet the same standard as other scholarships - not taxable if for tuition, fees and books - otherwise taxable.</p>
<p>Yes outside scholarships in excess of tuition etc etc are taxable. I don't know about if they should provide a 1098 t. </p>
<p>Make sure when you do FAFSA you include any taxable scholarships included on her tax return in the appropriate schedule - it will be deducted from her income so as not to negatively impact her EFC.</p>
<p>I think (again not a tax expert) that if a student is required to file a federal return they are required to file a State return. It is the case for Oklahoma anyway. Not sure otherwise.</p>
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FAFSA the first time out was much easier than the second year and now taxes too!
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<p>Spreadsheets are your friend. I started an excel spread sheet to keep track of everything. Between scholarships/grants/tuition waivers for my daughter and 529 withdrawals and hope tax credit for my son it got complicated.</p>
<p>Completed is using an online tax program without too much effort. She did not owe any taxes but now I have to correct FAFSA as I didn't think she would file a return. </p>
<p>I'll definately begin that spreadsheet now. Had some scrambling to do to find cost of tuition, room, board, and her other expenses.</p>
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<p>I think (again not a tax expert) that if a student is required to file a federal return they are required to file a State return.>></p>
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<p>You need to check with the individual states to find out THEIR requirements. In my state, if a child's income is below the threshold they set AND there are no deductions for state withholding (both have to hold true) then there is no need to file a state return.</p>
<p>Swimcats is probably correct in that if the student is REQUIRED to file a federal return, you MAY have to do a state return. BUT it's worth checking as the state requirements in some states is different than the federal requirement for filing.</p>
<p>E.g. one of my kids will be required to file a federal return because of his self employed status. He is not required to file a state return in any of the states in which he has worked.</p>
<p>Yes, states will vary. My d had to do a state tax return, unfortunately we live in a high income tax state, so the hit was higher than for the feds. </p>
<p>About the outside scholarships, for my D, they came through the college and so were reported on the 1098T form. If you get your child to print out their college charges, you should be able to see the scholarships coming in as credits (both institutional and outside) and they should add up to the total scholarships reported on the 1098T.</p>
<p>Many outside scholarships are administered by the school's fin aid dept-state grants, Byrd, etc. If that is the case, they are included on the 1098T. </p>
<p>On determining tuition, there can be some discussion/discrepency regarding paying spring fees in Dec, but mostly it seems simple to use hte amount listed on the 1098T- it should show total monies received and total tuition/deductible expenses.</p>
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<p>there can be some discussion/discrepency regarding paying spring fees in Dec>></p>
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<p>We use tax prep software to complete our taxes. A pop up actually came up that said "it appears that some of the college tuition paid was for 2008, but if the payments were made in 2007, that is allowable." The payments WERE made in 2007 or they would not have appeared on the 1098-T.</p>
<p>^^^I just ran into this and it took a couple of hours of phone calls to figure out before I went back to last year's 1098T and saw that the tuition was paid in 2006 and the scholarship was given in 2007. Since my d didn't have to file in 2006, but does for 2007, it took me awhile to connect the two. If you look, there's a little box that is checked that says payments will show up in a different year.</p>