<p>Maybe this has been discussed already. I am getting around to taxes (very frustrating) and realize that (unlike 2007 Form 1040), my Form 1040 for 2008 has a Line 8 which picked up my son's scholarship from Form 1098-T (Box 5) and tacked it on to our total income. I just reviewed my tax return from 2007 and there is no such line anywhere. </p>
<p>I am curious to know if anyone else is surprised by this? Also, if your student got a substantially large scholarship, was the entire amount considered income? I have never seen this before in all of the years I have been doing my taxes.</p>
<p>Wow. I’m surprised! But I don’t have a child in college yet. Next fall will be my first. </p>
<p>Does that mean private scholarships only, other than from the institution itself? I sure hope so! My son got large institutional scholarships, and I wasn’t counting on having to pay taxes on those amounts!</p>
<p>It is not taxable if it goes to pay tuition, supplies and fees. If it is more than that and goes for room, board or a living stipend, then it is likely taxable. </p>
<p>I second cartera45’s analysis and don9992’s implicit conclusion (i.e., that your son’s scholarship, if taxable at all, would be taxable to him and not to you). I took a quick look at the current version of Form 1040 and line 8 is the same as always, i.e., interest. (That form can be found on the IRS’s web site at <a href=“http://www.irs.gov/pub/irs-pdf/f1040.pdf?portlet=3[/url]”>http://www.irs.gov/pub/irs-pdf/f1040.pdf?portlet=3</a>.) Perhaps you are looking at something else?</p>
<p>P.S. There have been complaints about the IRS-provided/endorsed free tax prep software regarding errors. If you are using that software, perhaps you’ve fallen victim!</p>
<p>Yes, I was using an online tax program and for some reason it pulled his scholarship money into our gross income. Thanks for all of the extra information. I will file this away for next year’s taxes so I am not so confused. BTW - I ended up just going and paying a tax service to finish my taxes.</p>