<p>After doing some reading here I have more questions about how and if we should file our taxes. I had posted an earlier question but now have more questions. I hope this is the right way to continue, I do not know how to link my last question to this one... Our Daughter is at an in state university most of it is being paid for with grants and a small scholarship. She has income from her fast food job. We, her parents are not required to file taxes since our only income is form social security disability. D has filed her taxes electronically and we said on Fafsa we would file but since electronically filing is not available to us we are now considering amending the Fafsa and not filing taxes this year. We have already been selected for verification by the University, but also have to provide documentation for the state grant. My husband did not think we had to report any of the financial aid she received since we did not receive any tax documents regarding those. He also thought we could not claim her as a dependent due to her receiving those same funds. She did not claim the financial aid funds on her taxes either do these funds need to be claimed somewhere, if so what portion? Is she still considered our dependent? The family currently receives medicaid health insurance and I don not know if her not being claimed as a dependent will cause problems with her insurance coverage eligibility. She took out some subsidized loan money and she was eligible for federal work study but did not participate since her dad had a cancer recurrence resulting in a debilitating surgery and we thought it was more important for her to visit with him whenever she could rather than work last semester. Do I need to refile D's taxes with changes?</p>
<p>Any grants and scholarships in excess of qualified education expenses (basically tuition/fees/ required books) are taxable income to your daughter, not to you. So if grants were used to pay for room and board for instance, that is taxable income. If her total income (taxable scholarships, job, any unearned income such as interest etc etc) exceeds the cut off for her to file a return, then she must file and she must report the taxable scholarships.</p>
<p>For tax purposes, she is your dependent unless she provided more than 50% of her own support. Scholarships do not count toward the support test. I believe there is a form somewhere in one of the IRS publications that helps figure out whether she is a dependent or not for tax purposes.</p>
<p>For FAFSA, she will still be your dependent (assuming she is under 24).</p>
<p><a href=“404 | Internal Revenue Service”>404 | Internal Revenue Service;
<p>Should she have received something like a W2 or a 1099 from the state or the university? Is the pell Grant amount included in this as well? Will this taxable Grant income be considered as income on her grant application for the next academic year? I’m thinking we will have to amend her return and then pay taxes on the grant money she used for room and board. Are the Sub Direct loans she accepted taxable as well?</p>
<p>The school should have sent a 1098. Often they just have them available online somewhere on the school website. She should check with the school.</p>
<p>Yes, need based grants such as the Pell are included.</p>
<p>No, loans are not included as they must be repaid and are not included in income.</p>
<p>No, it won’t impact her EFC for next year. On FAFSA she would report her total AGI which would include any taxable scholarship/grant income. But there is another question on FAFSA that asks how much of the AGI was taxable scholarship/grant money. This question is used in the formula to deduct the taxable scholarship/grant from the AGI before the EFC is calculated. </p>
<p>It seems likely that she will qualify for the automatic 0 EFC regardless of her income as you are not required to file a return.</p>
<p>It is so confusing to have money she received based on financial need be taxed, it concerns me that it being taxable income will somehow make her or our family ineligible for the medicaid coverage or the need based grant she is relying on. Looking at the irs form is her grant money considered for her support(line 2) or as for other purposes(line3)? She lived in an off campus apartment, do we use her rent expense or is she considered as still living in our home?..this is why my husband thought we could not claim her as a dependent since she used the Grant money to put toward her rent and lived there.</p>
<p>I went through and added up her grants and expenses and it seemed that after her fast food job was added in and she would get about a $5800. deduction the taxes would not be too bad but then I went and found the 1098t and it lists her grants at about $20,000 double the figure I thought because it looks like the pell and state grant went into her university student account in december of 2012 so even though she did not receive the financial aid refund until 2013 it will all be included in 2012?</p>
<p>Which box of the 1098T has an amount in it, box 1 or box 2? What is the amount? Is that amount for fall and spring or fall only?</p>
<p>The 1098T is notoriously inaccurate, one of the reasons being when scholarships for spring are credited in December. Bills, bursar statements, receipts and records of payment need to be checked for amounts and timing.</p>
<p>Box 2 $8908.92 and box 7 is checked so i believe it is for fall 2012 and spring 2013</p>
<p>One question of clarification, is your daughter a freshman, was fall 2012 her first semester in college?</p>
<p>Rather than assuming Box 2 is for fall 2012 and spring 2013 because box 7 is checked, it is best to look at any bills you received and/or look at her online account to see when the amounts were billed.</p>
<p>Did your daughter or you pay anything out of pocket and if so, when and for what?</p>
<p>From the numbers so far, your daughter has billed QEE of about $4454 per semester and aid of about $10,000 per semester, leaving about $5546 as taxable income per semester. From that you can subtract required books and supplies paid for in 2012. Do you have receipts from those purchases? She got a refund of around $5546 and used it for off-campus living expenses? When did she pay for books and supplies for spring 2013?</p>
<p>You situation is complicated by the fact of just disability income, you not having to file, not knowing if you can claim her as a dependent. One point on that, scholarships/grants are NOT considered support the student provided themselves.</p>
<p>Your situation is really beyond my ability to give more specific advice on the internet. It could be that because your daughter didn’t receive the refund until 2013, that she could only report taxable scholarships for fall 2012 this year. Of course for 2013 she would have 2 semesters to report.</p>
<p>Do you have any source of free or low cost professional tax advice in your area?</p>
<p>
</p>
<p>That’s from page 14 of IRS Pub 501, just to back up my earlier statement.</p>
<p>Also, scholarships/grants are considered earned income by the IRS. Your state, if you have a state income tax, could treat it differently, my state does.</p>
<p>
</p>
<p>From table 2 on page 4 of Pub 501.</p>
<p>Her tuition and fees for Fall 2012 were $4600. grants $9875. , $1750 subdirect loan. I need to get her figures for the books and supplies hopefully she has receipts. For spring 2013 her tuition and fees were $4850. Grants $9875., subdirect loan1460., $324. supplement from university program. Books and supplies unknown but I think under $500 and that they were purchased in January 2013. She signed an 11 or 12 month off campus lease for fall 2012- spring 2013 and the rest of her funds have gone towards that. She hoped to live in the same apartment next year but I am not sure if she can afford it.
I have not looked into any tax assistance. The taxes were one of the things my husband still wanted to take care of and I had gotten a lot of good information last year to help with getting my daughter grants and into school this last year from CC. I came back looking to find information about whether or we should file taxes this year since we are not required to file and are ineligible to file electronically further delaying processing of grants and finacial aid. I came across the information about the 1098-T which has opened a whole new can of worms for me. Somehow he filed D’s taxes with turbotax and only used her fast food job income. So now I think I must refile her taxes and the Fafsa. I am also concerned about how her increased income will affect medicaid eligibility for her and our family, also wondering if we need to file taxes and claim her as dependent to be included in our family unit for income purposes for grants, medicaid and other assistance programs we are eligible for. my husband is only up and about for a few hours a day and his airway is compromised so as a result of cancer and its treatments so getting out for most anything is difficult since I don’t leave him alone. I will read through the IRS publication you suggested and see if that answers any questions if you have any advice on filing D’s taxes I would appreciate that information. D graduated high school last spring 2012 and started college as a freshman Fall 2012 and hopes to remain at the same school Fall 2013 utilizing the same grants and aid since otherwise our income has not and for now will not be able to change.</p>