<p>If I understand correctly, any scholarships received in excess of cost of tuition, fees, books, and supplies must be reported as income and taxes paid on that amount. Is that correct? I'm assuming the scholarships would be reported on the student's, rather than the parent's, 1040, right? </p>
<p>What about scholarship money that is used for travel expenses? </p>
<p>Will the scholarship foundations all send us tax documents? (haven't received any yet) </p>
<p>My son didn't save any receipts for his books and supplies, because we didn't even think about taxes on schol's until this week. Can he estimate those expenses, or would the irs require receipts?
thanks for any help!</p>
<p>Usually the standard is reasonableness. In the past, expense notes in a notebook were acceptable evidence of a reasonable purchase. I would expect the IRS to accept a reasonable estimate for books without asking for proof, but they might take a closer look as the cost exceeds a normal range. I think it is a good idea to charge books so the records of expenses can be maintained. That is, I don't think they would look twice at a $500 expenditure on books for a semester, but they might be interested in someone who purchased $2,000 dollars worth of undergraduate text books for two semesters.</p>
<p>We DID receive tax documents from the college that included ALL our outside scholarships PLUS the college's cost for tuition and fees. The document was also sent to the IRS.</p>
<p>We received a 1098. It showed all scholarships, grants, etc grouped together, then had a second number showing all the deductible tuition/fees. It is under my DD's SS#</p>
<p>It says books and living expenses are not subtracted from the total, so if you receive any $ towards living expenses, you may have a taxable event. It is all in the fine print on the bottom of the form. If the kid itemizes, they may be able to deduct those expenses on the tax return.</p>