Scholarship as Taxable Income

Colleges & Universities A-Z Indiana University - Bloomington
1

<p>It is the time for doing tax. Could someone share any insight?</p>

<p>1) Automatic scholarship - rrah's post #11 in the following link</p>

<p><a href="http://talk.collegeconfidential.com/indiana-university-bloomington/861338-question-about-fafsa-aid.html#post9768105%5B/url%5D"&gt;http://talk.collegeconfidential.com/indiana-university-bloomington/861338-question-about-fafsa-aid.html#post9768105&lt;/a&gt;&lt;/p>

<p>What about the qualified expense? Does that include the laptop, tuition paid to take M118/M118 before getting into IU?</p>

<p>2) Hutton's scholarship & DA scholarship</p>

<p>3) Other external scholarship</p>

<p>4) Summer research scholarship</p>

<p>Do we treat all four types the same way? Does IU send out the taxable income notification?</p>

<p>Thanks</p>

2

<p>My wife just dug out IU’s notification. They are all lumped together.</p>

3

<p>Ace, download Publication 973 for education related tax info. 2010 is the most recent, but it is fine to use.
<a href=“Redirect Notice”>Redirect Notice;

<p><a href=“Redirect Notice”>Redirect Notice;

<p><a href=“Redirect Notice”>Redirect Notice;

<p>Laptops are not qualified educational expenses.</p>

<p>Books are, if you take the American Opportunity Credit. </p>

<p>You need each student’s 1098-T form, which is downloadable from the Onestart.</p>

<p>the 1098-T probably is for Fall and spring semesters, 2011-2012. You probably want to only use the Fall semester for your taxes; then same Spring 2012 for your 2012 taxes; so you need to subtract out scholarships+grants, as well as tuition and fees in order to keep your numbers for 2011 only. You can get the numbers to subtract out from Onestart, looking at itemized scholarships/grants and tuition/fees.</p>

<p>The classes your kids took in 2011 prior to Fall 2011 semester you will probably be able to claim on your taxes more than likely in order to get the American Opportunity Credit or the Lifetime Learning Credit, whichever gives you a bigger return, although the “summer research scholarship” may prohibit you from doing that. I always figure my son’s summer classes into a credit for me, since he can’t claim it anyway, since he is my dependent. Also, he pays taxes on the part of his scholarships that is greater than tuition and fees as, by definition, that is his taxable income. Unless he got huge scholarships, he probably won’t pay federal taxes, just the state rate of 3.4% plus your county rate, after deductions.</p>

<p>That should get you started.</p>