Hi all,
I'm very excited to be receiving a scholarship as a graduate student, but unsure about the specifics of what I am required to report. I know that any portion of a scholarship not directly used for qualified expenses (tuition, books, fees) is considered taxable, and I need to report it as income. But I have a few specific questions:
I receive half of the scholarship in the fall semester, and the other half in the spring - so, over 2 different tax years. To keep the math simple, let's say I receive $5000 in the fall semester, and spend $2500 up-front on tuition and fees that I pay in my student account. I receive the other $2500 as a refund to my personal bank account.
- Do I have to report all of this $2500 refund as taxable income, OR should I keep track of how much I spend on books and other qualified expenses, and report any leftovers after THAT as taxable?
- AND, what if I plan on using that leftover money for future tuition/fees/other qualified expenses? Do I still have to report it as taxable if I am not spending it on tuition during that specific tax year?
And, since I receive the other half the following spring, in a new tax year - whatever the correct answer is for fall, do I do the same thing in my taxes the following tax year for the spring disbursement?
I appreciate any professional advice and answers. Thanks so much.
