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<p>I’m pretty sure you are mistaken about that, Xiggi. My son gets over $50,000 a year in financial aid from Brown and my CPA is well aware of his attendance and never said a word about it being taxable income. A quick Google search yields the following:</p>
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<p>[UMass</a> Amherst: Financial Aid Services - Frequently Asked Questions about Financial Aid](<a href=“Financial Aid : UMass Amherst”>Financial Aid : UMass Amherst)</p>
<p>Scholarships that pay for room and board are taxable</p>
<p>from the UMASS link LOR posted…it clearly states that money in excess of tuition, fees, books IS taxable income. It is under the question asking if the financial aid is taxed.</p>
<p>LOR…you should be getting a 1098t every year from Brown. It lists both the money received and the allowable expenses…except for books.</p>
<p>If the need based aid received exceeds the amount for tuition, fees, books…it IS taxable income. If your student’s excess is less than $6000 (I believe that is the amount), they might not actually OWE taxes…but if it is more than the threshold for filing,money would need to file…and declare this as income.</p>
<p>Clearly, $50,000 well exceeds the cost of tuition, fees and books at Brown. The amount above those costs would be taxable income for the student (not the parent).</p>
<p>Did you get a 1098T? Did you show that to your tax preparer re: your son’s taxes?</p>
<p>Disclaimer…I am not a tax preparer or expert!</p>
<p>The UMass link is clear: room and board monies are taxed.</p>
<p>Here’s a more direct link with references to relevant IRS publications:
[FinAid</a> | Scholarships | Taxability of Scholarships](<a href=“Your Guide for College Financial Aid - Finaid”>Taxability of Scholarships - Finaid)</p>
<p>Back to the OPs concern.</p>
<p>Here is my free advice of the day. Tell your parents that your first priority with your COLLEGE money must be to pay all of your 2013-2014 college related expenses. Tell those parents you really cannot discuss the use of any surplus money until the end of the academic year in May 2014.</p>
<p>That way…your FAFSA for 2014-2015 will be completed, and that worry won’t be one one!</p>
<p>Then between now and May 2014, make sure you pay for ALL college related items through August 2014…could include rent for off campus housing, etc. also, make sure you have “start up” costs covered for the start of the 2014-2015 academic year…could include things like books for the upcoming terms.</p>
<p>Update: Things have taken a turn for the worst. So I left copies of my credit cards at home in the event that I had problems using them abroad. Anyway, I checked my email, and my card company sent me an email stating that I am nearing my limit. My limit is $1000. I open up my account summary and it turns out that my entire credit line is gone. All $1000. In fact at this point, I think my limit has been overdrawn if that’s possible? I only had $43 worth of purchases that an autopayment takes care of, but it seems as though the charges my parent made comprise a little over $1000. I just sent them a really scathing email. At this point, I am very angry. How would I go about freezing my credit reports? I didn’t think it would have to come to this…</p>
<p>Freezing your credit reports only prevents them from opening any new credit in your name. It wont solve the current problem of their using your current card.</p>
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<p>Late to answer, but here it is. I am equally sure to not be mistaken here, with the caveat that all financial aid does not take the form of a grant. Loans, of course, are not considered taxable income. The other caveat is that the 15,000 should be the AGI – bottom of the first page of the tax return. </p>
<p>The way it works is that ALL your grants are taxable from the start. Bad news so far. However, there are allowed deductions that could and should reduce that taxable income. Posters above have linked to the IRS publications. You will find out that certain expenses are deliberately left out, with the biggest ones being room and board, personal expenses, and travel. There is a bit of grey area concerning book and supplies. </p>
<p>Fwiw, I used the figure of 15,000 as it represents the typical non deductible expenses (Room and travel) The next step is to figure the deductions and the type of taxpayer. If a student can be claimed on the parents’ return OR did not pay more than half of the expenses, he will have the lower deductions. Filing as an independent would add a personal exemption, with the result of having around a 5,000 taxable income (not the AGI.)</p>
<p>PS The above scenario is different for graduate students.
PPS You might want to ask your CPA if he is very familiar with education deductions and scholarship income.</p>
<p>blue…</p>
<p>You can call the credit card company and tell them that those charges were NOT authorized by you and must be removed. They have to do this. You didn’t give your family permission to use those card(s).</p>
<p>The credit card must correct this since YOU didn’t make those charges.</p>
<p>BTW…your credit card company will send new cards…you’ll need to have them sent to you abroad…or have them sent to a trusted friend who can send them to you abroad.</p>
<p>BTW…If your parents used the credit card to pay bills (elect, water, etc), then after the CC company corrects all of the unauthorized charging, your parents will get new bills from those companies showing that they still owe on those bills.</p>
<p>Did the credit card company tell you where they charged? Since they only had a copy of your card, it sounds like they had to do online charging…not “in person” charging.</p>
<p>OMG! I’m appalled at what your parents have done! A “scathing email” is an awfully mild response to what is simply theft/credit card fraud. You would have been well within your rights to bring charges against them. To put it bluntly, your parents are thieves, and you need to take better precautions with your credit cards and other possessions. I hope you can extricate yourself from this wretched family dynamic as soon as possible.</p>
<p>*To put it bluntly, your parents are thieves, *</p>
<p>Exactly…which is why I earlier said that people like this aren’t owed the truth about your financial situation. You don’t tell a burgler where your valuables are just because they ask.</p>
<p>I only had $43 worth of purchases that an autopayment takes care of</p>
<p>Ok…so the credit card company should have been suspicious when suddenly there were lots of charges!!</p>
<p>Also…you say that you left copies of credit cards (plural). So far, you’ve only heard from one company. The rest have likely been compromised as well. You need to have ALL unauthorized charges removed. ALL OF THEM.</p>
<p>I emailed my card company-I am waiting to here back. Fortunately, it is only one card. I also requested that they change the account number. My parents just told me that they know I’m angry, but they’ll pay me back. Yeah right. I’ve heard that so many times. But I guess it doesn’t matter whether they would have paid me back or not since I hopefully won’t have to underwrite the charges.
What makes me so angry is that they didn’t even make an effort to ask, they just took my card and used it.</p>
<p>Blue…you need to call the credit card company ASAP so that you are following their protocol when you realize that you have had fraudulent charges on your account. Sending them an email might not protect you from the financial liability. They are required to remove any unauthorized charges from your account. Be aware though that they might initiate an investigation into the fraudulent use which could bring the police into the picture. I definitely think that is what you should do.</p>
<p>I think your parents need a wakeup call. What would they do if a family member did this to them? </p>
<p>If you want to give them the option of making this right before the cc company takes over with their fraud process, you could call them and tell them that you need the money today (tomorrow? or whatever deadline you want to give them) so that you can pay off the charges and that otherwise you are left with no option other than to report the fraud. </p>
<p>Having said that, I don’t think they deserve the option.</p>
<p>Blue…you need to call the credit card company ASAP so that you are following their protocol when you realize that you have had fraudulent charges on your account. Sending them an email might not protect you from the financial liability. They are required to remove any unauthorized charges from your account</p>
<p>Exactly… An email is NOT enough. You have to CALL them and report that you did NOT make those charges nor did you authorize them. </p>
<p>You also need to call and have ALL your card numbers changed because your parents will not stop with this one no matter what they say. Right now, they’re going to say anything to make you happy (We’ll pay you back. We’ll never do this again. Blah Blah Blah). It’s all BS.</p>
<p>Credit Card companies usually call when they suspect fraudulent charges…and you had a lot of charges w/in a short time…which was out of character for your past spending. They may have called your home. If so, God knows what went on then. A family member may have pretended to be you to approve the charges.</p>
<p>BTW…you need to change all passwords and “security questions” to answers that your family won’t know or guess.</p>
<p>CALL ASAP. You can even call now, depending on where you are abroad, with the time difference. if that’s too many minutes for your phone contract, ask a local friend to see if they have unlimited phone calls on their landlines.
For the rest, ^^ exactly as mom2collegekids said in #96.
You’ve been betrayed and taken advantage of, but your parents probably don’t even realize what they’ve done. Taking whatever they can from whoever they can is probably part of their M.O.
And to people who think in that way, “credit card” money isn’t “real”; check every other card you own, check your credit record, check everything. Then change your cards, passwords, security questions, etc, etc. Make SURE the credit card company (and bank) understands these charges were made without your consent. You have to tell them precisely over the phone.
Oh, re: “we’ve fed and clothed you all these years” - they should realize that if they hadn’t, it’d have been called neglect or abuse, and either you’d have been placed in a foster family, or they’d have been put on trial for not providing food and clothes to their kid (or both). It’s not something you’re supposed to repay or that you owe them. It’s the basic duty of parenting to provide for one’s kids and they can’t try to guilt trip you with this.</p>
<p>Because all of this is likely the result of impulsive behavior operating within a memory-less system combined with an entitlement attitude, none of this will stop until the student puts the proper safeguards into place.</p>
<p>I am much older than you but have experienced the same with my parents. Saying no is definitely the best response. My father years ago actually opened a credit card under my mother’s name without her knowing and ran up 80K worth of debt, which led to him filing bankruptcy. My mother keeps telling me that she thinks he has tried to steal my identity so I keep a close eye on my credit reports and have added the alerts so that I get notified if the amount charged exceeds the amount I have set. It is unfortunate but that is life sometimes.</p>
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<p>You may well be correct, Xiggi; financial aid for room and board could well be considered taxable income. What I found odd is that Brown’s financial aid office did not question our documents this year saying that my son did not file a tax return because he did not have an income.</p>
<p>My accountant is on vacation, but it appears we either accidentally still find ourselves in compliance or my accountant took this into consideration; however, in all fairness, I did not talk to her at length about my son’s taxes because I considered it a non-issue. My son is a sophomore, so for last year’s taxes only the fall semester would count as taxable income and that one semester’s room and board is less that the standard deduction, after taking into account our out-of-pocket expenses for books, supplies, and money paid directly to Brown. For 2014, it looks like we will have a surprise extra tax bite.</p>
<p>This is the stupidest rule imaginable – so if your family is too poor to send you to college and you get a full ride scholarship, you may STILL not be able to go because you can’t afford the taxes involved?</p>