Interesting question. I had a friend who mentioned that she heard that academic (and perhaps athletic) scholarship money counts as taxable income. What's up with that? Anyone have any insight? Thanks.
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I'll report it on his return when he gets a 1099, I guess. 
My friend must have gotten wrong info:
http://education.yahoo.com/college/financial_aid/articl...olarships_taxes.html
http://education.yahoo.com/college/financial_aid/articl...olarships_taxes.html
The test is whether the award covers room/board.
Take the basic tuition/fees for the year and subtract the amount of the award. If there was an excess award that could be used towards room/board, then that portion may be considered taxable income.
In this (and all tax questions), it's better to consult with a tax expert, but that's the general guideline.
Take the basic tuition/fees for the year and subtract the amount of the award. If there was an excess award that could be used towards room/board, then that portion may be considered taxable income.
In this (and all tax questions), it's better to consult with a tax expert, but that's the general guideline.
HHH is correct, refer to your accountant.
The 1099 should give breakdwon if there is a taxable amount.
The 1099 should give breakdwon if there is a taxable amount.
JT,
Your son's school will send a Form 1098-T. This is for information only - and not to be filed with your return.
It will itemize all academic charges and other charges, payments, grants and loans.
The school's are required to send it out no later than Jan,31.
You would use this information to follow HHH's advice.
The net amounts will also affect your tuition and fee deduction (Line 34 in Form 1040) - if applicable.
You can also research any questions by going to the IRS website.
Your son's school will send a Form 1098-T. This is for information only - and not to be filed with your return.
It will itemize all academic charges and other charges, payments, grants and loans.
The school's are required to send it out no later than Jan,31.
You would use this information to follow HHH's advice.
The net amounts will also affect your tuition and fee deduction (Line 34 in Form 1040) - if applicable.
You can also research any questions by going to the IRS website.
....or maybe momandcpa could field the question...
iitg,
oops, thanks about the form, hubbie gets the 1099!
oops, thanks about the form, hubbie gets the 1099!
I used to do tax returns for Canadian NHL players playing in the US.
Generally your scholarships are reported as income but your tuition is deductible and you havs a personal exemption . In Canada room and board is not dedutible. I assume it is similar in the US.
Most scholarships barely cover tuition. so you may have losses to carry forward.
Generally your scholarships are reported as income but your tuition is deductible and you havs a personal exemption . In Canada room and board is not dedutible. I assume it is similar in the US.
Most scholarships barely cover tuition. so you may have losses to carry forward.