<p>Parents, please help. I only file self employment tax forms, so I don't know about my D's W-2 forms. She earned almost 7,000 this year, and I understand she has to declare all scholarships and grants that exceed tuition and fees. I have not looked at the exact numbers, but I am thinking about another 16,000. That takes her to 23,000 for the year. Can somebody explain to me what is going on with this, is she getting taxed on her grant? Thanks, I just need to plan for this.</p>
<p>I am still trying to figure this out, would the approx 23,000 be her wa
ges/tips, or does the grant and scholarship money go somewhere else on the tax form?</p>
<p>I don't know the answer, but you might try posting this on the financial aid forum, here on CC.</p>
<p>You are correct- her income is comprised of W2 earned income and the 1098T DIFFERENCE between total grants & scholarships and the tuition.</p>
<p>For example if her grants on the 1098T total $25,000 and tuition is shown as $9000, then you would normally write in $16000 next to the top line for income and include it in that number which would be W2 + 1098T net.</p>
<p>If you use turbo tax it will do it.</p>
<p>And yes, scholarships are taxable where they exceed tuition. :( And no, the school does not add the taxes to the COA, somehow the kid has to come up with that. If she did work & have grants and you did not provide income, she may be able to file as independent in order to have a lower tax due.</p>