<p>As a college freshman on financial aid, I have recently become aware of an interesting tax form I was sent which lists the "payments received" and "scholarships or grants" and then totals it up at the bottom of the page.</p>
<p>What I don't understand is what I'm supposed to be doing with this information, if anything. It is above the standard deduction for a single student claimed on a parents' tax returns, but is it really taxable or just a 'here's this info for your records' kind of thing?</p>
<p>I'll note I know little to nothing about taxes, so would appreciate any and all advice short of going to H&R Block or its equivalent (you see, I am on financial aid...)</p>
<p>The purpose of the 1098 T is to let you know how much you paid in qualifed tuition (less scholarships and grants) for purposes of the tuition credits or deduction. It's not taxable to you. On the contrary, if your parents claim you and their income is within the limits, it would lower their taxes.</p>
<p>The IRS is informed by the school as to how much tuition and fees are (NOT ROOM AND BOARD) and how much you got in scholarships. If you got outside scholarships, that is also reported by the giver to the IRS. If your scholarships exceed tuition and fees, it is taxable income. Of course, you won't pay taxes on it if your deductions and exemptions exceed the amount received.</p>
<p>Found out my parents know all about this stuff, and in addition know what to do with it. Whew! ;) I still don't entirely get it, but I should probably just save everyone some time and read over the volumes and volumes of information available to me. <em>_</em></p>