Offers Rolling In

[Ohio2015Parent]

I would think many IS schools because of budget cuts due to states being belly up will pay attention to this situation. VA has a deficit currently, and every IS college will receive state funds for their school. Some are dictated on how they must utilize these funds via their regulations.

For example Jcleppe's DS. Why pay any money out of their budget if the Army is willing to pick up the entire tab? It would be fiscally irresponsible of the school to use their money.

I am curious on how this will impact him for tax purposes. Will it be seen as income?

Yes, room and board monies paid by either the school or ROTC will be taxable income. Any funds paid out to the student over COA by the school will also be taxable income. I plan to spend the entire month of January on the IRS site and also have a brother-in-law just finishing up HR Block tax school. DS has been paid out approximately 3,500. plus a 1,800. room grant, depending on how his school handles the grading quarters he could have winter quarter also - or it could go into the 2012 year taxes. I'm sure more tax savy posters will chime in soon.

 

[paradoxer]

1098T

Yes, room and board monies paid by either the school or ROTC will be taxable income. Any funds paid out to the student over COA by the school will also be taxable income. I plan to spend the entire month of January on the IRS site and also have a brother-in-law just finishing up HR Block tax school. DS has been paid out approximately 3,500. plus a 1,800. room grant, depending on how his school handles the grading quarters he could have winter quarter also - or it could go into the 2012 year taxes. I'm sure more tax savy posters will chime in soon.

From a university website, and the way many schools report:

On the 1098-T form,XXX University reports student’s name, SSN, address and indicates if the student was a graduate student or at least half-time during the calendar year. The university reports the amount billed for qualified tuition and related expenses and not the actual amount that the student paid to the university during the calendar year. Since XXX University does not identify payments on student account with specific charges, it is impossible to determine which payment is made towards the qualified expenses and which is made towards the unqualified expenses.Therefore, the university has elected to report amounts billed in Box 2 instead of payment received in Box 1. Students should use their personal records and university fee receipts to determine the actual amount paid towards the charges reported on the 1098-T statement.

Bottom Line: Student/parent is required to do the math and check the billing period(s) for each year's 1098T.

 

[Pima]

Rut-ro Reorge for Jcc123.

If I understand you correctly Ohio, that means for Jcc123 between the 8K for R & B and the 9400 in pocket from excess it will make your month in January look like a week, and that is before you hit the mutual fund issue if there are mutual funds.

My mind is already in pain thinking about how many hours it will take. I believe the last study I read was that it takes the avg American over 50 hrs to do their tax returns. I know it takes us more than the avg.

paradoxer, your link said "graduate" student, not undergraduate. I would think it is the same. Our kids schools do exactly what your post states. Basically it is up to us to prove how much we paid over the yr. It is easy for us since 1 never received more than what it costs, and the other we pay monthly from direct withdrawal.

I will state freshman yr you get a lower amount compared to other yrs because realistically they only attended for a few months. As soph and jr. they attend 9 months out of the yr.

Since we have completely diverted this thread now. I would remind people that if they received reimbursement for moving that this too may be a tax issue.

 

[Ohio2015Parent]

Paradoxer is correct about the 1098T form, the schools can report differently.

I have only personal knowledge of our older DD's school - they report the current academic year into one 1098T - even though the school year technically involves 2 different tax years. She does not receive more than COA through her scholarships so the situation with my DS will take some time to figure out.

Will wait to see how DS's school reports when the 1098T is available online in January.

There are many threads on the tax implications of scholarships on the forum, so a quick search should provide more details for those who are interested.