Ok, I was told by the financial aid office last year that I don't have to report financial aid on my taxes if it *all* goes to the university (all for room/board, tuition and fees, and books)?? Anywho, I took their advice and especially since last year I still owed money, I followed their advice. HOWEVER, this year, since I was not living on campus, I don't know how/what I'm supposed to report (for the 2005 year). It covered tuition/fees and books, and I still have a little bit of my pell grant and some of my student loans left over.

How would I report this next year when filling out taxes (I don't like to wait on KNOWING the stuff--doing on the other hand....lol).

Do I report all financial aid, or only student loans, or what?

Thanks (and if the financial aid office was wrong--I hope I don't get audited!! lol)

You do not have to report SLs. They are not "income" to you since you have to pay them back (if you end up getting some of them "forgiven," you may have to, but that's a different story). As far as your other financial aid, it really depends on what kind it is. The Internal Revenue Code basically says that EVERYTHING is income (again, "income" does at least only mean money that you get to keep), unless it's specifically excluded, not the other way around. "Qualified scholarships" are excluded under the tax code and you can find that explanation HERE.

I hope this helps! Good luck!!

edited to add: even if it does turn out that you did it wrong, you can always file an amended return. Yes, you may have to pay interest/fees, but if it's a substantial amount, it's better than an audit and the penalties from that!!

Thanks..ALL my financial aid is either Texas/federal grants or student loans (I *never* managed to get any scholarships but that's a different story ).

I was confused because I know you can take a deduction on any sl interest you pay (I think? lol)..and since I have an unsub loan, I'm going ahead and paying the interest now so that it doesn't get tacked onto the principal and making me pay interest on interest (at least I'm assuming that's how it would work).

If you haven't already, you still may want to look at that definition from the IRS. While they use the term "scholarship," it may or may not be the same as what you or I would traditionally define it as. In other words, your grants may actually fall under the way they define it.

Good luck!!

yeah, it said:




So if I *do* get an audit, I'm screwed (for listening to FINAID's advice that room/board doesn't count either)...

*BUT* since books apply what little I had left over from my grants I can use there (for next year), and then don't have to worry about sl's--and I'm sure the previous yrs I can do the same (apply grants to tuition/fees/books, and sl's to the housing, since I don't have to claim that, right?)