<p>I was filling out my FAFSA app and recieved a question I didn't have last year. FAFSA is asking me if I reported my grants and scholarships to the IRS. This is my first year recieving grants and scholarships and I had no idea I had to report them. I tried doing some research, but I am confused on what and how to report. I called my college and they are telling me to put zero, but as a dependent student my mom wants to correct her taxes before I finish filling out my FAFSA app. What should I do?</p>
<p>2010-2011, I recieved 6600 total from pell grant, FSAG grant, and an academic scholarship from my college. I spent 2960 on college expenses, spent the rest and I still have 1100 I haven't used. How should I go about this?</p>
<p>You report on your tax return scholarship amounts that exceed “eligible expenses.” Those include tuition, mandatory fees, and books. If you received more in grants than the total cost of your eligible expenses, the excess is declared as income.</p>
<p>Any scholarship money that is specifically intended for room & board, personal expenses, travel or any other non-eligible expense is also declared as income.</p>
<p>For example, as student could have $10,000 in eligible expenses, and $6000 of it covered by grant aid or scholarships. None of that $6000 is reported as income.</p>
<p>The same student could also be given $5000 of additional aid in the form of a grant to cover room & board, and the whole $5000 would be taxable. You can not decide that $4000 of it makes up the rest of the uncovered eligible expenses since the grant was specifically for room and board.</p>
<p>If the application of the grant aid is not specified, then you can allocate it first to your eligible expenses and everything in excess of that amount is taxable.</p>
<p>So if my grants and scholarships are all for school purposes I don’t report them? Or do I report the 3640 from them that I didn’t use for school?</p>
<p>
No. Not all school expenses are qualified expenses. Only tuition and mandatory fees and required books (books that are required for everyone in the class). Anything else such as non required supplies, or room and board is a non qualified expense and scholarship/grant money used to pay for those non qualified expenses is taxable income.</p>
<p>Whether you will have to file a return and actually pay taxes will depend on your total income including the taxable grants/scholarships. As a dependent student you have a $5700 standard deduction (if all your income is earned income - it gets more complicated if you have unearned income - but taxable scholarships are considered earned for this purpose). If your total income is under your standard deduction you will not owe any taxes.</p>
<p>If you do not have enough income, including taxable scholarships, to have to file a return, then you do not have to report the taxable scholarships on FAFSA. If you do have enough to have to file a return then you report your AGI on FAFSA which will include the taxable scholarships/grants, then you report how much of the AGI was from taxable scholarships/grants in question 43d (the formula will deduct the scholarships/grants from your AGI so they do not impact your EFC).</p>
<p>The left over 3640 is my only income(unemployed), since it’s under 5700 I don’t report it or I do report it and I don’t owe taxes?</p>
<p>If your costs for tuition, mandatory fees and required books totaled $2960, then yes, everything above that is taxable income. Keep in mind that the academic year is not over yet. How is that scholarship money being allocated to you over the course of the academic year? Certainly with a Pell grant you would not have received the whole year’s amount in one payment in the fall.</p>
<p>On your other question, I believe dependents are advised to file if they make more than $900 in “unearned income” – which your scholarship money may be deemed to be. Perhaps Swimcatsmom can weigh in on that.</p>
<p>For one term I recieve 1800 in pell, 1100 in Fsag, and I just recieved the academic scholarship this term for 800.</p>
<p>Did you receive a Form 1098T from your college? It reports how much aid you received and how much of it went to “eligible expenses.”</p>
<p>
Scholarship money is considered earned income for tax purposes. It is reported on the same line as W2s etc.</p>
<p>No I haven’t recieved a form 1098T. My first year of college I didn’t recieve any grants and I used my mom’s income when I did FAFSA. I am using her income this year as well, she is talking about ammending her taxes or something to fix it.</p>
<p>I just don’t know what to do because I called the people at my college who are there to help you fill out the FAFSA app and the lady told me put zero and talk to a tax advisor…</p>
<p>If you had to report taxes you would do your own tax return. Do not put them on your Mom’s tax return. That would make the overall taxes much higher. than they should be as you get a standard deduction of $5700 before you owe any taxes. You are still her dependent for tax purposes and for FAFSA even if you did have to file your own return.</p>
<p>Schools will not usually give advice about how to file your taxes. That is not their responsibility and they are not usually tax experts. But if your total taxable scholarships/grants plus any other income are below the standard deduction you would have if you filed a return ($5700) then your income is not high enough for you to be required to file a tax return. As I said above, if you do not have to file a return then there is nothing to report on FAFSA as far as taxable scholarships/grants.</p>
<p>I repeat - DO NOT REPORT THIS ON YOUR MOM’S TAXES.</p>
<p>I’m confused by your questions. First off, from your first post, you said “2010-2011, I recieved 6600 total from pell grant, FSAG grant, and an academic scholarship from my college. I spent 2960 on college expenses, spent the rest and I still have 1100 I haven’t used.”</p>
<p>Then you said “For one term I recieve 1800 in pell, 1100 in Fsag, and I just recieved the academic scholarship this term for 800.”</p>
<p>So has all the grant money been awarded you by this point in the academic year? (If you’re on semesters the answer is probably yes, if you’re on quarters, perhaps it has not.) Looking at the math, it looks to me like you’re on semesters.</p>
<p>Okay, so you have, by now, paid all your eligible expenses right? Tuition and fees for both term and bought all your textbooks for the 2010-11 year.</p>
<p>If, out of your total amount of grant aid, you spent $2960 for eligible expenses, then, yes, the remainder is taxable income. It looks like you don’t need to file a tax return anyway (and even if you did, you’d owe no taxes because your income is too low for that). So, if you don’t file a tax return, the answer to your first question (“FAFSA is asking me if I reported my grants and scholarships to the IRS”) is no. If they are asking for a dollar amount it is 0 since that’s what you reported to the IRS.</p>
<p>I am not sure why your mother is thinking she should amend her return though.</p>
<p>Thanks so much for making this very clear swimcatsmom and 'rentof2. Is the standard deduction always the same, 5700?</p>
<p>That is the standard deduction this year for a person filing as Single. It varies depending on filing status (single, married filing jointly, married filing separately, head of household, qualifiying widow/er.)</p>
<p>And it can change from year to year.</p>
<p>Okay, again thanks so much. =]</p>