College Supplies Grants

HELP!!!!!!Reporting Scholarships and Grants on Tax Return?

I dont file my taxes on my own, my dad pays someone to do that for me. I just hand him my W-2, and thats it.

you see, i am a freshman in college. and i just found out that i had to report my aid on my return. i asked my dad if he did, and he said no. Cuz the preparer did not ask, and he did not know. I recieved $4,000 after my tuition and fees. i used that money to pay to books, supplies, a laptop, and a car b/c i was riding the train to school.
So what should i do, my taxes are already sent and filed, and i am afraid me and my father might get in trouble. Should i call and explain this simple mistake, or what.
P.S. i am having trouble about filling out my FASFA b/c it said Scholarships and Grants reported on your tax returns, but my problem is that it wasnt reported. So what do i put there, i know i should wait. but the longer i wait, the less money i get back from the school b/c the aid goes out fast!

Whoa, whoa, whoa, calm down!

Scholarships and grants are NOT generally treated as income, so long as they are used to pay for "qualified educational expenses". Because these funds are not income, they are not reported to the IRS.

You do have a small problem, but it's nowhere near as calamitous as you think.

Qualified educational expenses include tuition, books, supplies and equipment that are REQUIRED for every student in your course of instruction.

In your case, this means that your books are qualified expenses (as long as they were required textbooks), but the supplies, the laptop and the car are NOT qualified expenses.

The same treatment applies to both your scholarships and to your grants - any money spent on non-qualified expenses is treated as taxable income.

What you'll need to do is to go back and figure out how much of your $4000 was spent on books. I can't tell for sure, but from what you've described, the remainder of the $4000 was spent on non-qualified expenses.

If your father filed a 1040 or 1040A tax return, he should include the taxable portion of your scholarship and grant funds on Line 7. He'll also need to enter "SCH" (short for scholarship) and the taxable amount on the dotted line next to line 7.

You can find all of these instructions in Chapter 1 of IRS Publication 970, which I have linked to, below. Publication 970 is called "Tax Benefits for Education", and Chapter 1 covers "Scholarships, Fellowships, Grants and Tuition Reduction".

It would be worth your dad's time to look through the rest of the lengthy publication, because later chapters explain the various types of income tax credits and deductions that your father is eligible to take because he is paying higher education expenses.

If your dad's tax preparer was aware that you are a college student, and he didn't ask whether you receive financial aid (and what you're spending that money on), he/she is not really providing the kind of service that your dad should be paying for.

You can make changes to a filed tax return - I'm sure the preparer can advise your dad what he needs to do now.

As for your FAFSA form - go ahead and put down the amount that you're going to calculate for "unqualified expenses", subtracting from the $4000 the money that you spent on required textbooks.

For future reference - make sure you use scholarship and grant money to pay your tuition and buy books - use your "other" money for other expenses.

Good luck - I hope this information helped.

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Are Obama Grants Encouraging Moms to Earn a Degree

Despite the fact that higher education is important, there are often a number of obstacles that can hinder potential students from enrolling in college. Family obligations and financial concerns are often at the top of this list, especially when it affects single mothers. In an attempt to alleviate concerns associated with going to college, Obama grants are intended to encourage mothers to return to college to earn a degree. The purpose of federal grants, in many cases, is to help disadvantaged groups to attend college. An endowment often given to low-income students, is the federal Pell grant. Since the Obama administration has stated that it places a high priority on education, the benefits of Pell grants have been augmented in order to be a greater help to potential students. Working moms are especially encouraged to apply for the Scholarships for Moms program, which is just a title given to a portion of the standard Pell grant program. Equipping low-income mothers to earn a degree will provide a stimulus to the lagging economy, the administration believes, and also be a great benefit to the families of those mothers, as a result of which will be an increase in their earning power in the work force. Although $5,000 from a Pell grant may not seem like a lot of money, when you consider the high cost of education these days, it should help defray the other expenses associated with going to college. As well as books, supplies, and housing, a student has also travelling expenses to pay. For a single mom, these miscellaneous expenses may also include childcare. One great advantage of the Pell grant award is that the money awarded does not necessarily have to be applied to college tuition. As long as the expense is vital to obtaining an education, it can be covered by the grant money. This program does not cater specifically to traditional students - it provides opportunities to traditional and non-traditional students alike. Any mothers who want to return to college to earn a degree are just as welcome as a student who is fresh out of high school. Consideration is given equally to mothers who would like to stay home and take care of their children while doing online courses, to potential students who would prefer to go to a small community college. The most important factor is that all willing students are able to earn a degree that will provide them with significant opportunity in the job market. Obama grants are purely an effort by the current administration to show that education truly is the key to a bright future. By allocating a significant amount of money to pay for education, everyone from working mothers to young adults has a chance to go to college.
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