Q. 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?
A. Keep track of how much you spend on books and other qualified expenses, and report only leftover money as taxable.
Q. 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?
A. Yes. The money is taxable in the year you receive it, unless you spend it on qualified expenses in the same year.
Q. Do I do the same thing in my taxes the following tax year for the spring disbursement?
A. Yes. For taxes, it's all accountable by calendar (tax) year, not by academic year.
