<p>Oh, I forgot to mention her tuition, room and board, and books will not even use up all her scholarship money of the 25K she won.</p>
<p>That’s ok. She may have to file taxes, given the amounts. Add up the pure grant/scholarship money she actually received this fall. Subtract from it the tuition, fees, books, computer, school supplies. That is what she has to report for taxes, and she needs to report it on her own return. I don’t give tax advice, so that part you need to discuss with someone who knows the tax code well. She may have to pay taxes on the amount, depending on how much it is. When she gets her next payment in January, use some f that to pay the taxes owed, if any and then set set some aside for payment of taxes next year on the excess again. She does not have to include the amount of her award money as assets for FAFSA.</p>
<p>Thank you so much–I understand now! Whew!</p>
<p>It’s not all that easy, and I don’t know all there is or even am sure about how it works for taxes. I do know that a dependent child has to file taxes even as s/he is still considered and reported as a dependent on the parents return if that child’s earned income is over $5700(?), or so. Scholarship money is considered EARNED INCOME by the IRS. </p>
<p>Also I don’t know if it is possible for her to be considered independent and filing her own taxes and for you to just not claim her as a dependent as an alternative and net out better over all. Those are things that have to be discussed with someone who knows taxes and your personal situation better.</p>
<p>So for 2012, the amount NOT going towards Tuition, fees, computer, supplies and whatever other categories and expenses that you are allowed use the monies tax free. is reportable as EARNED INCOME for your daughter and taxes MAY have to be filed and paid ( it seems from what you have written that the amount is over the threshhold amount that determines whether you have to file or not). But only awards for one semester have been given, and there is still award money coming that will be dispensed in 2012 for the second semester. SInce she is lucky enough to also be getting a check of excess, that can be used for the 2012 taxes incurred, and some set aside for what you expect will be the tax bill for 2013 when the amount can end up being double since two semesters will be involved that year.</p>
<p>Also be aware and beware that next year’s aid may not be as generous depending on whether the scholarships your D got are renewable. Also some schools will not reduce aid for the FIRST year of outside awards, but will do so for subsequent years. Even though the awards will not be added into the EFC and school’s expected contribution, they will know about the awards, and may adjust accordingly. All of this is completely up to the school. I have one kid who went to a school that would immediately integrate outside awards and one who went to a school that lets kids keep all of their outside scholarship money all 4 years, and my alma mater lets you keep both for the first year only and then starts integrating.</p>
<p>So, whew, is absolutely right.</p>
<p>For a college student, a computer is only a qualified education expense(QEE) if it is required by the school. Few schools require students to have a computer. Supplies to be included also have to be required, art supplies, chem goggles, that sort of thing, not general notebooks and such. And note that room and board are not QEE.</p>
<p>Also check your state income tax requirements if your state has one. Our state considers scholarships/grants to be unearned income unlike the IRS, so more of it becomes taxable.</p>
<p>Also, for the IRS, in determining whether you can claim your student as a dependent, scholarships/grants are NOT considered support that the student provided themselves. Most often, but not always, it works out best that the parents continue to claim the student as a dependent and the student files as being able to be claimed as a dependent on someone elses return.</p>
<p>Here’s a link to IRS pub 970:</p>
<p><a href=“http://www.irs.gov/pub/irs-pdf/p970.pdf[/url]”>http://www.irs.gov/pub/irs-pdf/p970.pdf</a></p>
<p>Section 1 talks about the taxability of scholarships/grants.</p>
<p>Hi, </p>
<p>I am a parent with first child heading off to College. Just went to “Upenn” presentation on Sunday & listened to the spiel about students “graduating” debt free. </p>
<p>When I got a chance to mingle, spoke to the Alumni present – some of them are paying every dime they earn to paying off Student Loans …</p>
<p>I am trying to fill up the FAFSA4Caster information, and based on the AGI for year, it comes up a dollar amount for the assets. </p>
<p>Should this dollar amount be “updated” to show all your investments, CDs or retirement funds ? </p>
<p>If we change the “dollar amount”, then the EFC changes signficantly, even though most of the monies are completely tied up ?</p>
<p>The same applies for the CSS/Profile stuff.</p>
<p>Any pointer’s in this will be great.</p>
<p>Thanx for the help in advance.</p>
<p>rainier07,</p>
<p>This is an old thread that someone re-opened and now you’ve asked another question. It would be far better to start your own thread. It’s not really clear to me what you are asking but the one thing that stands out is that for fafsa, funds in formal retirement accounts, 401k, IRA etc. should not be reported as assets.</p>
<p>But I would recommend starting a new thread.</p>