<p>I got a letter from National Merit today which explained that all scholarship money not used for books, tuition, fees, and school supplies is taxable. (and that's true for ALL scholarship monies, not just National Merit.) That means that the money awarded to pay for housing and meals is taxed. I'm interested in the "tax" experiences of others who have scholarships. Did you find it better to file your own return or to be included as a dependent on your parents' return?</p>
<p>Well if you wanna be REALLY crafty then just don't worry about it. I mean seriously, do not worry about it. Do you honestly think anyone cares?</p>
<p>I know for a fact that the IRS cares -- especially if you owe money and don't bother to file a return!</p>
<p>First of all, the various scholarship foundations (including National Merit) DO send a notice to the IRS about the awarded scholarships, so I do not think it would be advisable at all for anyone to avoid filing and listing this monetary gift as the law requires.</p>
<p>To the OP: I have sent you a private message regarding how our family handled the tax filings for our son's full ride scholarship. Each individual, however, should consult a tax professional to make sure they receive the correct advice since every family's situation is different.</p>