@dancelance “Also I will NOT disclose cash scholarships, yes it’s unethical, but you have to play the game to survive. My friends in college told me so.”
Aside from the ethical issue, not sure It is a good idea to risk your full financial aid package by hiding $1,000 from Harvard.
You do understand that your dishonesty could cost you your admission spot at Harvard as well as any financial aid you fraudently receive. Part of your package is a Pell Grant which is federal funding. It is considered fraud to lie about your finances for financial aid gain. You risk a lot by doing so, including admission, aid, and a fine.
It’s more than unethical. It’s actually a crime.
Not worth the risk for $1000…or even $5000. Harvard is GIVING you $60,000. You are being very penny wise and pound foolish.
Insurance is not part of QEE, so if you take a scholarship and use the money to pay insurance, then yes, it is taxable.
From your figures, without insurance, you listed about $46k in tuition, fees, books. You have about $62k in scholarships. That means about $16k is taxable income (unearned). If you earn $4k working, then you’ll be declaring $20k in earned and unearned income. You’ll get a $6300 exemption, and pay taxes on $13.7k, some of that at the unearned income rate of your parent (which may be the same as the 10-15% rate you’ll pay on earned income if your parent is low income). Roughly, you will owe about $1400-2000 in taxes. (Of course, you’ll only owe half that for 2015 because you’ll only get one semester of costs your freshman year).
If you take the additional grant for the insurance, just up everything by $2400, so your taxes on that portion will be $240-360. That’s a waste if you don’t need the insurance. It doesn’t matter if Harvard pays itself for your room and board or refunds the scholarship money to you - if you don’t use it for tuition, fees, or books, you pay taxes on the money.
Unfathomable to sacrifice your integrity for $1000. But I guess you already determined your integrity isn’t worth $1000.
Insurance is not part of QEE. <<<
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this student may not know what QEE is. It is Qualified Education Expenses. And, the student may be surprised to know that his room, board, aren’t QEE either. Pretty much only tuition, fees, and books are QEE.
^^QEE was explained to the OP numerous times in this thread, along with tax implications, and the OP stated he read Publication 970.
Thanks everybody, I looked it up online and it all makes sense now!
If my grandfather gives me a $1000 gift for graduation must I report it as income?
Gift != income, but it is an asset.
A gift from grandpa is not income. Money from a sponsoring scholarship, however, must be reported to the school.
The $1000 gift will only be an asset if it is IN your possession when you file your financial aid application forms next year.
Okay then how is a cash scholarship which is a one time thing different from a scholarship?
“survive”? $2,000 laptop?
You got accepted to Harvard and received a very generous aid package, your tuition is covered, plus room and board, you have insurance covered already and you will receive about $2,000 refund, easily covering books and other expenses. You don’t need a $2,000 laptop.
The aid from Harvard is need-based, if you get $2,000 in scholarships, you have less need. They might reduce your grant or reduce your work study amount first.
Work study is an entitlement for a job. You still have to find a job and work the hours, I think you can work less hours if you want.
So with all this and your summer job you will be fine, you will more than survive.
And the less grant money Harvard spends on you the more they can give another low-income kid to enable them to attend.
You got accepted and can afford to attend, that’s more than a lot of kids can say. Don’t abuse the opportunity you have been given.
There is NO difference between a cash scholarship, and one paid directly to Harvard on your behalf. It doesn’t matter if it is a one time award or renewable for years. BOTH must be reported to the college.
What exactly are you asking? It sounds like you hope,to gain cash scholarship awards, and do not plan to tell the college you received them. If I am mistaken, please correct me.
I don’t know why anyone would want to keep helping now that OP has shown his/her true colors. It’s like aiding and abetting theft. I suggest everyone bow out. I just hope OP’s credentials for Harvard came from a more ethical source.
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You don’t need a $2,000 laptop.
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Please don’t buy a $2k laptop. You don’t even need a $1k laptop. Seriously.
You’re not going to get any sympathy about “not having money for extras” if you blow that much on a laptop.
Thanks everybody, I’ve read both section 102 and 117 of the tax code and I’ve read up on gift vs. scholarship stipulations. That is all.
Just be honest. Really honest. Harvard frowns on dishonesty. Dishonesty related to financial,aid is fraud.
Make sure you really understand what you read…and are not twisting the interpretation to suit your needs.
I never said I’m spending 2000 on a laptop, the school has provided up to 2000 dollars for all equipment software etc involved in getting laptop so this includes printers and other things. In the case I reach 6200 if I don’t maximize the 2000 dollars I lose it–I don’t get the difference back.
Either way I just talked to someone and since I didn’t complete an application for the scholarship, it can be considered a gift. So it doesn’t have to be reported.
My kids got $2000 scholarships, paid directly to them. Everyone thought I was a fool for reporting them to the school and on their taxes, but I did. My nephew received the same scholarship and did not. One of my kids has a NCAA scholarship and they are very picky and I didn’t want to screw it up so I just reported it.
Some people report every dime earned from babysitting and mowing lawns while others don’t. It’s really up to you to do your own taxes and report funds you have received. If you feel comfortable classifying money as a gift, do it. If you are audited, you’ll have to explain it. I don’t think this makes you a tax cheat or that you are committing fraud, but you may be taking a chance. People do it all the time. What’s the value of the items donated to Goodwill? How much mileage was for volunteer work? How much did I donate to the church? Was this income or a gift? Employee expense or not?
All I can advise is to keep good records of buying books because you will be able to count those as QEE. Teacher requires a certain pillow or dance mat? Keep the receipt. Paints, chemicals, wood for projects? Keep the receipts. It must be required specifically. Even the laptop must be required to be included in QEE.
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once again there’s the scholarship provision where you can cover self help and up to 2000 for a laptop reimbursement before your Harvard grant is reduced. If I have scholarship money to cover up to 6200, which essentially will get refunded to me as a check,
I never said I’m spending 2000 on a laptop, the school has provided up to 2000 dollars for all equipment software etc involved in getting laptop so this includes printers and other things. In the case I reach 6200 if I don’t maximize the 2000 dollars I lose it–I don’t get the difference back.
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?
If you don’t spend $2k on equipment, what do you lose??
@mom2collegekids I would lose the difference between the 2000 in scholarships I get and the money I don’t use. In other words I lose nothing, but Harvard would take the remaining money. That’s not to say I expect to use exactly 2000 , but I do plan to get a laptop, case, external drive, printer, etc if I do get to that amount. If I’m paying out of pocket then I’d definitely not get a printer.