Was
this reported to you on a 1099-MISC? If
so, the tax reporting depends which box of the 1099-MISC is reporting your
scholarship income.
REPORT
1099-MISC
IF
box 3 reports your scholarship, report the form:
To enter/edit
a 1099-MISC form:
- Open (continue) your return if it's
not already open.
- In the Search box (top right-hand
corner), type “1099-misc’
- Click on the Magnifying Glass icon.
- Click on “Jump to 1099-misc”
link high-lighted in Blue.
- Answer the Step-by-step
instructions.
and
make adjustment using the steps below:
-
Federal taxes
- Wages and
Income
- Scroll down to Less Common Income
- Select Miscellaneous Income.
- Select “Other reportable income”,
click ‘Yes’ and you will be prompted to enter Description and
amount. Please be sure to write a short explanation and enter the amount
as a negative number. At this point, the form 1040 will
show full amount as taxable AND as a negative adjustment on line 21. The
end result: form is reported but not taxable.
If box 7
reports the scholarship, you would have to report it as
self-employed income, then enter the same amount as your "business"
expense. This will ensure that form 1099-MISC is reported for matching
purposes, but the amount is not taxable as self-employment income.
1.
Federal Taxes
2.
Wages and Income
3.
Self-Employment, Select Income and Expenses - follow the interview
questions; you would report the scholarship as if you own a business; once general questions are answered, you
would enter the scholarship as an expense (you can create your own
description). The end result: form 199-MISC is reported, but the income is not
self-employment income, because it shouldn’t be.
REPORT
SCHOLARSHIP INCOME CORRECTLY
To
report scholarship income in Turbo Tax, you must visit Deductions and Credits,
Education Expenses section. You must answer all the questions, the taxable
amount will be computed as the excess of your scholarship over the
qualified education expenses.
- Federal
Taxes
- Deduction
& Credits
- Scroll
down to Education
- Select
Expenses and Scholarships
- Follow the
prompts… It will be somewhat confusing as you are answering the
questions as if you claim an education credit… answer the
initial questions and select that you did not receive form 1098-T. You
will be asked for school’s name and address, just fill out the program
information you are in... You will eventually see a screen "Did
(your name) receive a scholarship or grant in 2016? Please enter your scholarship
in other Scholarships/Grants/Fellowships; this will ensure that the scholarship
is taxable on line 7 form 1040 as wages.
Once
done, you may review your form 1040 and to verify that line 7 of
the form looks correct. You may do so prior to paying for the
program:
- From My
Account drop down, select Tools (you must be
logged into your tax return)
- Select View
Tax Summary
- Select Preview
my 1040
