Solved

I am filling out my federal tax formsI am being asked if i paid for room and board w/scholarships & grants but I also received financial aid what if IDK hw it was dispers

Forum|Forum|7 years ago
June 3, 2019
1 reply
0 views

I am wondering should I put yes or no not knowing how it was dispersed

TurboTax Free Edition Online

Best answer by MichaelMc

You can assume that scholarships and grants were applied first to qualified tuition and fees, which will minimize the probability of excess scholarship and grant amounts being considered taxable income. Student loans can be applied to anything else, since they are never counted as taxable income.

Keep in mind that the amount of qualified tuition and fees paid with tax-free sources of funds will not be included as the basis for the American Opportunity Tax Credit or the Lifetime Learning Credit. In some cases, it is better to treat your scholarships and grants as taxable, to maximize the available tax credit. For more information, please see IRS Pub. 970 Tax Benefits for Education, Coordination with Pell grants and other scholarships, page 14.

M

MichaelMcAnswer

Employee

You can assume that scholarships and grants were applied first to qualified tuition and fees, which will minimize the probability of excess scholarship and grant amounts being considered taxable income. Student loans can be applied to anything else, since they are never counted as taxable income.

Keep in mind that the amount of qualified tuition and fees paid with tax-free sources of funds will not be included as the basis for the American Opportunity Tax Credit or the Lifetime Learning Credit. In some cases, it is better to treat your scholarships and grants as taxable, to maximize the available tax credit. For more information, please see IRS Pub. 970 Tax Benefits for Education, Coordination with Pell grants and other scholarships, page 14.