I’m currently filing my 2014 taxes. I was going to receive a decent amount of money, but once I entered my fafsa information it said I owed a lot of money. Am I committing tax fraud if I don’t report my fafsa??
You are confused here. FAFSA is just an APPLICATION for financial aid. What on earth are you using from the FAFSA for your tax forms? Your tax forms are used to verify FAFSA, not the other way around. You file your taxes with no regard to FAFSA. You report your income from w2s, 1099s and other sources.
If you received scholarship or financial aid last year. I mean actually received it, not was offered it, but it actually got put into your school account and applied to expenses, then you do have to report that. Any amount OVER QEE (qualified educational expenses) is taxable income. Those are amounts over the tuition, fees, required books. Did you get money from a college last year? Are you in college? Not enough info here.
Yes, I am in college. I received money from financial aid and Calgrant. I got a 1098-T form from my college, and it has all the info and money I received for the 2014 school year. On my taxes it asked to enter any 1098-T forms. I know someone that didn’t report their scholarships and grants so they could get more money. And I just want to know if I can get in trouble for not reporting it.
The Form 1098-T, also referred to as the “Tuition Payment Statement”, is mailed to the student to assist you, the taxpayer, in determining if you are eligible to claim tax credits under the American Opportunity Credit or Lifetime Learning Credit.
Form 1098-T is mailed to you to remind you that you or your parents might be eligible to claim tax credits under the American Opportunity Credit or LIfetime Learning CRedi. It is called the “Tuition Payment Statement”. It does not necessarily have exactly what you did pay in 2014 in in tuition. Some schools .report the amount billed, not the amount paid. You need to go into your bursar’s account and figure out exactly how much you received in scholarships and grants, not were awarded, but actually got put into your account as a credit, and how much you directly paid for tuition and fees for 2014.
I am not a tax expert, so you need to talk to someone who is. What you actually got paid (not awarded , but paid) in 2014 in scholarships is reduced by what you paid in QEE,(tuition required fees, required books, required supplies) What shows up as possibly taxable is what’s left. Depending on your tax situation, you may owe some taxes for 2014, but without knowing if you are a dependent on your parents returns, your total income, can’t say how it works.
When you fill out the 2015 FAFSA, your scholarship, grants, workstudy earnings are subtracted out of your earnings, and they do NOT count as income for financial aid purposes. Taxable income and financial aid income can be completely different. Grants and work study money counts towards taxable income once you hit a certain amount and once you subtract out QEE, but for financial aid it is subtracted out on the FAFSA form and does not count. You don’t have to worry about QEE on the FAFSA, but you do for tax purposes.
See chapter 1 of IRS Pub 970. It tells you if you need to report scholarships on your tax returns.
@luna31613 Regarding your post #2 are you asking if you can you get in trouble for committing fraud if you knowingly don’t report taxable income?
Also, if you do have taxable scholarships (see Publication 970 on irs.gov), this won’t effect your FAFSA EFC because the amount is subtracted back out (if you fill out the FAFSA correctly).
@Madison85 Yes. I want to know if I’ll get in trouble for it. It’s not even that I want to get money back, I just don’t want to owe anything.
Yes, you can get in trouble for cheating on your taxes.
Wow.
@luna31613 What are your 1098T numbers in each box and the stated cost for tuition and fees and what did you spent on books in 2014? Are you a freshman? Maybe @annoyingdad can help you determine if you are preparing your taxes right or not.
I figured it out, thank you though. Yes I am a freshman.