you get a federal tax form do you need to fill out everything including social security?
Also why a federal tax form?
This makes no sense. What are you talking about? When you file a US IRS Tax Return, yes, you have to put your SS number on it!
What kind of scholarship are you asking about, and who is providing it?
Because the group awarding the scholarship wants to deduct it. They need your SSN to issue a 1099 (which is wrong) or need you to fill in an I-9 so they can show the money went to you. You’ll need to report the scholarship to your school and then it will be reported on the 1098. You may be taxed on some of this award, but it depends on your entire tax picture, cost of school, other qualified expenses.
Welcome to the world of ‘no free lunch.’ Ask if the scholarship will be taxable to you as income (thus the 1099 from the group giving the money. If they issue a 1099, the IRS will expect to see that money accounted for on YOUR taxes next year as income. Try to avoid that.
??? How? Other than by declining the scholarship? Scholarships used for anything other than tuition, fees, & books are taxable no matter how the donor declares them. The only way to avoid that is not to accept the scholarship.
No, some groups or companies, especially small ones, don’t know that there are more ways to deduct the award than just issuing it as 1099-Misc income and will issues that 1099 if they don’t know. If the group issues the check to the school, the school will include the funds on the 1098-T and then the student won’t receive the 1099 - a solution as easy as having the check sent to the school. Someone recently posted that he received a 1099-Misc, and I that’s wrong, that an award isn’t income but a scholarship which MIGHT be taxed as income but not necessarily wrong. By ‘avoiding that’ I meant having the 1099 issued erroneously. Know what you are getting tax-wise.
Got it. Thanks, @twoinanddone!
So it’s better to fill out the I-9 then the 1099 and with 1099 I’ll get taxed more? Sorry I’m new at this kind of stuff.
You don’t fill out a 1099; it’s issued to you already filled out for information purposes.
So when I sign up for the scholarship and if I win it’s already issued to me right like you said?
If the entity awarding the scholarship chooses to issue a 1099 form to scholarship recipients, it will be sent to you after the tax year is over, already filled out. But as twoinanddone mentions above, providing 1099 forms to scholarship recipients may not necessarily be the correct thing to do.
Middkid will correct me if I am wrong.
I thought monies indicated on a 1099 were treated as income.
Yeah, I’m guessing that’s why twoinanddone takes exception to scholarships being reported on 1099 forms - in many cases, the scholarship money is probably not taxable income.
If a 1099 is issued, the IRS is going to look for an income report on the 1040. If a 1098 is issued, it is just informational so there isn’t necessarily income or a deduction and thousands of 1098s are issued with nothing for the taxpayer to report or deduct. A 1099 that isn’t income can be explained, but you know there is going to be a question or review. I just think it would be better (easier) if the correct form was issued.
If the scholarship is going through the school, I think the school will just include it with the 1098. If the scholarship is going directly to the recipient, then the donor may issue a 1099. OP, what form is the scholarship group asking you to fill out? If it is an I-9, ask them how they are going to report the scholarship and who they are going to issue it to (you or school). If to the school, they may just want your SSN to track the funds through your student account.
Clarification:
A 1098-T is for tuition.
A 1098 is for mortgage interest.