<p>I hope that someone out there can help me with this question. When we received my son's FA for his new school last spring, we were told that we would have to report part of the FA Award as income for him in excess of a specified amount. At the time, I expected we would receive a tax form from the school tell us how much they reported to the gov't. as income for him. I haven't received anything from the school.....the school has only advised me to report that amount as income and work with my tax adviser. Does anyone have any experience with this? If so, I'd like to here what you've done. Thanks.</p>
<p>I cannot answer your question. Instead, I have a question of my own:</p>
<p>– Why should you pay tax on the award at all? </p>
<p>The school tuition is, say $40K. But you were allowed to pay let’s say $20K for example, because of your financial need. Since you didn’t physically receive any money, I don’t see how the IRS can get a cut.</p>
<p>When I went to “A day with Andover”, they said the true total cost per student is around $70K. So even for a full pay student, Andover is paying him/her $30K. I don’t believe any of the Andover FP students are paying taxes on the $30K.</p>
<p>If the school’s tuition were marked up as one million, but they allowed you only to pay $40K to get in. Would anyone take up the offer and end up in bankruptcy instead because of the taxes?</p>
<p>I’m with WBJC2BS on this one–never heard of paying taxes on financial aid.</p>
<p>From what I can gather, if your FA grant exceeds tuition (i.e. room and board) you have to report that portion as income…the amount that exceeds academic tuition. I called the IRS and they told me that I should receive a 1098-T. I am trying to confirm that with the school.</p>
<p>For boarding students, room and board are included in tuition. You may have got additional money from the school to pay for other things, like instruments, equipments, etc. If you were actually given the money, and spent it on things, I would say the IRS may have a case. Good luck.</p>
<p>No, you don’t have to pay taxes. You won’t get a 1098. That info is for college financial aid.</p>
<p>Thanks for the input everyone. I am concerned with not reporting it as income since the FA Director at the school said that I needed to. Still wondering if anyone out there has any experience with this. Haven’t gotten a response from the school about whether I’ll be receiving some sort of a form or not. Thanks.</p>
<p>Here’s the info. we got from Exeter in our orginal FA letter. </p>
<p>If the amount of the award exceeds tuition, the additional income may constitute taxable income for the student. Tuition at Exeter was $30, 289; the total calculated cost of attendance was $40, 650. So any student with an FA award of more than 75 percent may have taxable income.</p>
<p>Tuition needs to be separated from room and board. This is taxable income for the child, no the parent, and it’s only the amount that exceeds tuition that is taxable. </p>
<p>Hope that clarifies things some.</p>
<p>My daughter is in her third year at BS with financial aid. The first year I asked Exeter about taxes and they said they could not give tax advice. But they also never sent a 1098 form and I was advised elsewhere that the financial aid they provided was not taxable. </p>
<p>On the other hand, my older daughter is in her first year in college with financial aid. She received a 1098 for the amount of the financial aid she received and the form also indicates the amount of the allowable tuition and expenses so it will be very easy for me to figure out what amount is left that is taxable. But it is in her name and will go on her tax return, not mine.</p>
<p>I don’t use an accountant. I use Turbotax and do my own taxes and have never entered the amount of the financial aid received from Exeter. First of all, it would be in my daughter’s name and she does not make any money so does not file any taxes, second, they never sent a 1098 form, third, I was told not to worry about it, fourth, Turbotax doesn’t ask about financial aid for high school students, just college students. </p>
<p>In addition, Exeter does not itemize the tuition and board, it’s all lumped together in one price so I wouldn’t even know how to calculuate what part is tuition and what part is room/board to even begin to determine what is taxable, if any were. </p>
<p>So that is my experience.</p>
<p>Thanks Classicalmama. That’s pretty much what I was told. Our school gave us similar information. I was hoping I would receive some sort of form as a record…but guess that not likely. </p>
<p>I too use TurboTax and was able to find the info. around entering non-tuition related scholarships. You have to dig for it…but it’s there. Thanks for everyone’s input…I think I know what I need to do now. Thanks.</p>
<p>Photo Op: It was itemized at the bottom of the financial aid award letter we received last March. I haven’t seen it split out elsewhere, though I imagine the tuition versus room/board could be estimated by looking at what a day student pays.</p>
<p>About TurboTax…the guarantee it offers does not extend to whether they’ve plugged in the tax code correctly. It is limited to the mathematical calculations. The calculations may be the wrong calculations, but as long as the mathematical operations are performed correctly, you will have no claim against TurboTax if your return is incorrectly prepared (at least not according to the express terms of their guarantee). TurboTax does not stand behind its product in terms of it being a complete, accurate and comprehensive software manifestation of the Internal Revenue Code, so I wouldn’t look to whether it does or does not treat a somewhat obscure item (and how it treats it) as being authoritative and dispositive of the situation.</p>
<p>The tax advice given here – although just as lacking in guarantees as TurboTax software – is superior in terms of its reliability and usefulness because you can personally follow-up and check cited sources and everything posted in these forums is subject to many watchful eyes who can (and will gladly) vet and challenge any misleading assertions made here.</p>
<p>My sister is applying late to Hawaii Prep and my mom’s asked me to find the answer to one of her questions. According to her, the PFS/SSS closes Jan 31 and even with rolling admission schools it would be impossible to file a statement in request for FA after then. Is this true, and if it is, is there a way around it?</p>
<p>aurelie - I’m not aware that the PFS/SSS “closes” after January 31. If your mother is having a problem, she should telephone customer service for NAIS - they’re very good about answering questions!</p>
<p>Thanks dodgersmom! Her English isn’t that great so she’s a little apprehensive about calling so I guess I’ll be the one calling…</p>
<p>aurelie - If that’s the case, you might want to try and help your mom get around the site, instead. If the two of you do it together, you may find you don’t even need to call NAIS.</p>
<p>Also, don’t recall if you’re international, but you don’t have to make an overseas call - or make a call when you should be in school. You can definitely email instead.</p>
<p>From my experience of filing the PFS (7 years) it does not close. After all the returning students don’t file until later (this year I will file my LAST PFS by April).</p>
<p>Thanks! I just came back and saw the posts- right now my sister’s interested in Hawaii Prep, and we’ve emailed the school about financial aid but haven’t received a response yet. </p>
<p>@dodgersmom I’m not international but we live on the west coast, so we’ll be sending an email instead to NAIS.
@NewEnglandmother thanks I’ll definitely let her know! I honestly don’t know where she saw that it was due on the date maybe it was just the deadline for the schools I’m applying to and she mixed the two up.</p>