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I have a scholarship/fellowship through my graduate program that covers all academic expenses, and a stipend for education expenses. My Fellowship at the school requires the completion of an internship at a nonprofit, meaning I couldn't intern at a private company (where I would make more money). As a result, I used my stipend to pay for moving and living expenses related to this internship. It seems to me that anything associated with this internship would constitute a "required educational expense"; are there any deductions I can take with this?
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Unfortunately, the IRS code states that you must include in gross income:
You get a tax break since you do not have to pay social security or Medicare taxes on your scholarship/stipend/fellowship money.
Generally, you pay income taxes on taxable scholarships and grants but not social security or Medicare taxes. See Tax Topics - Topic 421 Scholarships, Fellowship Grants, and Other ... https://www.irs.gov/taxtopics/tc421.html
Scholarship, fellowship, stipends or grant money, if not used for qualified education expenses is taxed as income and belongs on Form 1040 Line 7 with SCH in front of the line number.
Per IRS Publication 970 Tax Benefits for Education : Payment for services. In most cases, you must include in income the part of any scholarship or fellowship that represents payment for past, present, or future teaching, research, or other services. This applies even if all candidates for a degree must perform the services to receive the degree.
To enter scholarships, grants, stipends NOT INCLUDED on your Form 1098-T:
To enter scholarships, grants, stipends INCLUDED on your Form 1098-T:
Related information:
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