Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Tax Question - 1098-T & Scholarships?
Old 02-11-2014, 04:23 PM   #1
Recycles dryer sheets
 
Join Date: Jun 2011
Posts: 81
Tax Question - 1098-T & Scholarships?

So our daughter finished her first semester at college. She lives at home and commutes daily.

She receives a tuition-only merit scholarship directly from the University and also a Bright Futures scholarship from the State of Florida. The University scholarship is not refundable to the student for any portions not used. The Florida Bright Futures scholarship money, however, goes to the school first ... then the school puts any leftover money in her bank account each semester.

The 1098-T reflects she received $1339 in scholarship money (we assume this is Bright Futures) for the fall semester and shows $312 as payments received for qualified tuition & expenses. We know the $312 was for miscellaneous fees the University scholarship does not cover. (the rest, a little over $1k was deposited in her bank account)

So my question is about the merit scholarship she has from the University itself. Is this not reported on the 1098-T because it is a non-refundable tuition-only scholarship? I know her tuition was (or would have been) a lot more than $312. Do I need to worry about it when filing taxes.

Thanks in advance for any advice.
__________________

__________________
retiredatfifty is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 02-11-2014, 05:28 PM   #2
Thinks s/he gets paid by the post
sengsational's Avatar
 
Join Date: Oct 2010
Posts: 3,826
Interesting question. My kids' 1098-T forms had a box for total tuition, and another box for scholarships and grants. I don't have the same 'problem', though...my kids don't get paid to go to college! You might try asking on collegeconfidential.com if you don't get an answer here. It sounds to me like you might get another 1098-T with the full tuition on it? Maybe call the school and see if they have anything besides 'consult your financial advisor'.
__________________

__________________
sengsational is online now   Reply With Quote
Old 02-11-2014, 06:09 PM   #3
Recycles dryer sheets
 
Join Date: Jun 2011
Posts: 81
Quote:
Originally Posted by sengsational View Post
Interesting question. My kids' 1098-T forms had a box for total tuition, and another box for scholarships and grants. I don't have the same 'problem', though...my kids don't get paid to go to college! You might try asking on collegeconfidential.com if you don't get an answer here. It sounds to me like you might get another 1098-T with the full tuition on it? Maybe call the school and see if they have anything besides 'consult your financial advisor'.
Box 1 of the 1098-T indicates $312 and Box 5 says $1339. That's pretty much all it says. I know tuition at this school is about $160 an hour for residents & she took 15 hours.

I admit the scholarships & living at home do help our modest ER budget (& leaves me more $ for fishing & motorcycles )

I may call the school soon & see if someone there is inclined to enlighten me. (btw - I am my "financial advisor" - no room in the budget to pay for one!)

The school is University of West Florida. Decent State school, reasonably priced, and small class sizes: http://uwf.edu/
__________________
retiredatfifty is offline   Reply With Quote
Old 02-11-2014, 07:16 PM   #4
Thinks s/he gets paid by the post
 
Join Date: Jan 2006
Posts: 2,925
Perhaps the school netted out the expenses paid by their scholarship and reduced both the fees paid and the scholarship boxes by that amount .
The difference between those 2 boxes feels like taxable income?
see p. J1 here http://www.irs.gov/pub/irs-pdf/p4012.pdf
__________________
kaneohe is offline   Reply With Quote
Old 02-12-2014, 11:00 PM   #5
Recycles dryer sheets
 
Join Date: Jul 2004
Posts: 430
Another great place to ask your question would be at the Savingforcollege.org site:

Savingforcollege.com Forum - Forums powered by UBB.threads™
__________________
gindie is offline   Reply With Quote
Old 02-12-2014, 11:21 PM   #6
Recycles dryer sheets
 
Join Date: Jan 2010
Posts: 183
Check out q17 in the link for your answer.
American Opportunity Tax Credit: Questions and Answers

Since the university scholarship sounds like a full tuition waiver, it has no tax implications and they may not have to give you a 1098-T. The state scholarship on the other hand impacts your tax return. Worth double checking, since my understanding could be wrong.
It is worth understanding the rest also. See if you qualify for American Opportunity Credit.
__________________
pixelville is offline   Reply With Quote
Old 02-12-2014, 11:32 PM   #7
Full time employment: Posting here.
 
Join Date: Mar 2008
Posts: 704
My son in graduate school was similar, expense reported around $300. No grant or tuition reported. If you use tax software, just report what's on the 1098-T. It will deduct the expenses and report the scholarship net as income. In my son's case, he's a TA, so a W-2 is involved. Another son had a mis-timed scholarship payment with no tuition expense, so it was all income for him in his last semester.
__________________
akck is offline   Reply With Quote
Old 02-13-2014, 08:42 AM   #8
Thinks s/he gets paid by the post
 
Join Date: Feb 2008
Location: Indialantic FL
Posts: 1,196
You likely won't qualify for the American Opportunity Credit since the total of your scholarships etc are more than the cost of tuition and books and supplies. The money returned to your daughter is not taxable to you, unless your daughter has other income and needs to file a tax return on her behalf. You will pay taxes on the net difference between the amount Box 5 amt on the 1098t and (the box 1 amount plus books and supplies required by the school (including any computer etc required by a course)

Is Florida Bright Futures Scholarship Tax Free? | Finance - Zacks
__________________
JimnJana
"The four most dangerous words in investing are 'This time it's different.'" - Sir John Templeton
jimnjana is offline   Reply With Quote
Old 02-14-2014, 12:26 AM   #9
Recycles dryer sheets
 
Join Date: Jun 2011
Posts: 81
Quote:
Originally Posted by jimnjana View Post
You likely won't qualify for the American Opportunity Credit since the total of your scholarships etc are more than the cost of tuition and books and supplies. The money returned to your daughter is not taxable to you, unless your daughter has other income and needs to file a tax return on her behalf. You will pay taxes on the net difference between the amount Box 5 amt on the 1098t and (the box 1 amount plus books and supplies required by the school (including any computer etc required by a course)

Is Florida Bright Futures Scholarship Tax Free? | Finance - Zacks
I know we're not going to be able to take the AOC.

You seem to be saying two things here (underlined above) ... first, that the money returned to my daughter is not taxable to me: and then second, that the net difference is?

The article you linked seems to say the unused portion is taxable. Books, Parking sticker, etc were about $500, which we agreed to pay for her ... so looks like the rest will be taxable to somebody.

Can I just have her file it on her own return? The leftover $1000 went straight to a bank account in her name. She had no other income so her return would be so low she wouldn't be taxed on it. It's not really a lot of money to pay tax on ... just wondering how I should do it. Don't want to pay 1 cent more taxes than I have to.

I'm working with Tax Act, but been going back & forth changing things around so haven't yet figured out if this item it affects my taxes at all.
__________________
retiredatfifty is offline   Reply With Quote
Old 02-14-2014, 01:18 AM   #10
Full time employment: Posting here.
 
Join Date: Mar 2008
Posts: 704
The income should go on her tax return.
__________________
akck is offline   Reply With Quote
Old 02-14-2014, 07:25 AM   #11
Thinks s/he gets paid by the post
 
Join Date: Feb 2008
Location: Indialantic FL
Posts: 1,196
Quote:
Originally Posted by retiredatfifty View Post
I know we're not going to be able to take the AOC.

You seem to be saying two things here (underlined above) ... first, that the money returned to my daughter is not taxable to me: and then second, that the net difference is?

..
btw parking doesn't count as an expense. My mistake the excess scholarship money is taxable to daughter provided she has other income requiring that she file, it is not taxable to you.
__________________
JimnJana
"The four most dangerous words in investing are 'This time it's different.'" - Sir John Templeton
jimnjana is offline   Reply With Quote
Old 02-14-2014, 01:37 PM   #12
Recycles dryer sheets
 
Join Date: Jun 2011
Posts: 81
Quote:
Originally Posted by jimnjana View Post
btw parking doesn't count as an expense. My mistake the excess scholarship money is taxable to daughter provided she has other income requiring that she file, it is not taxable to you.
She has no other income. Can she file anyway?
__________________
retiredatfifty is offline   Reply With Quote
Old 02-14-2014, 10:50 PM   #13
Thinks s/he gets paid by the post
 
Join Date: Jan 2006
Posts: 2,925
Quote:
Originally Posted by retiredatfifty View Post
She has no other income. Can she file anyway?
She can always file. I think what was meant is that the taxable scholarship belongs to your daughter and if she has other income, there may be a tax.
If no other income ,there is likely no tax.

See p. F2 here http://www.irs.gov/pub/irs-pdf/p4012.pdf
__________________

__________________
kaneohe is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Kids getting scholarships, helping FIRE! Retire44 FIRE and Money 0 10-18-2013 11:23 AM
Weird at&t, bell south & lucent tax question Amethyst FIRE and Money 35 02-21-2012 05:19 AM
College Financial Scholarships For Later College Years yakers Other topics 1 05-18-2009 01:24 PM
When in dist. mode- reinvest div & int & sell shares or take div & int in cash? cashflo2u2 FIRE and Money 12 12-11-2008 04:25 PM
Ruh-roh-- Hurricanes Jova & Kenneth & Lidia & ... Nords Other topics 3 09-18-2005 05:55 PM

 

 
All times are GMT -6. The time now is 03:39 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.