100+ Years of Combined Tax Resolution Experience.
Are you or your child receiving scholarships for attending a college or university? College can be expensive, and most students rely on some sort of assistance to afford higher education. This assistance can come in several different forms; need-based grants, government grants, school scholarships, outside scholarships and other types of grants. Now receiving assistance can be confusing for students, especially when it comes to the tax implications. Here’s what you need to know when it comes to scholarships and taxes.
A general rule is that if you are seeking a degree and you are using the funds from the scholarships or grants for “qualified education expenses”, you won’t have to pay taxes on the funds you receive. What qualifies for these expenses? Any funds you use to pay for your school’s tuition, required school fees, and books or supplies that are required for a course. It’s important to note that this does not include room, board or utilities. Those are not qualified education expenses. To qualify for the degree part, you must be a degree candidate at an educational institution that maintains a regular faculty and curriculum. So, if you use all the funds you receive from a grant or scholarship on your tuition and books and you are working towards a degree, you won’t have to worry about claiming or paying taxes on that income you received.
But, unfortunately, there’s always a but. If you receive a large sum of funds via scholarships and grants and you have money left over after paying your qualified education expenses, that money is considered taxable income. As stated earlier, any funds that go towards your room, board and utilities are taxable. Any money you use for college expenses outside of the required supplies for your education is taxable. Keep in mind that any scholarships or grants you receive as payment for teaching, research or other services that are required, are considered taxable.
If you do need to claim some of your scholarship or grant funds, you can claim that on your federal tax return when you file in April. You will likely receive a W2 from the sources of your scholarship or grant so you have that information when you file. You can learn more about including your scholarship funds on your tax return, here.
The Internal Revenue Service (IRS) is increasing audits on cannabis businesses — the agency is on a mission to ensure that cannabis businesses adhere to the tax code. Unfortunately, cannabis companies must comply with more strict tax laws than other businesses and can claim fewer deductions. Most business owners don’t realize this or aren’t able to meet the reporting responsibilities on their own. If you own a business in...
The world of tax laws is a complex maze, and the IRS statute of limitations is your guide. It tells you how long the IRS has to audit your tax returns and collect any money you might owe. Knowing this timeframe is essential. It’s your protection against the IRS coming after you years down the...
If you and the Internal Revenue Service (IRS) disagree on an outcome or decision involving your tax matter, you can legally appeal their decision. IRS tax appeals allow you to state your case to the IRS appeal division for another evaluation. Whether you need to dispute a tax penalty, assessment or other decision from the...
One of the keys to business success is understanding the tax rules and how they apply to or affect your company. In states where marijuana is legal for medical or recreational use, there are usually special taxes that apply to the sale of the drug. If you’re considering opening a dispensary or own one already,...
The landscape of cannabis taxation is as dynamic as the changing tides of its legal status across various jurisdictions. Entrepreneurs and consumers alike must navigate a complex maze of federal and state tax regulations that often clash or overlap, especially as more states join the roster of cannabis-legal states. Businesses entrenched in the burgeoning industry...
Sales tax can be a daunting topic for any business owner, especially if your organization sells across state lines. Knowing the ins and outs of sales tax law is essential for staying compliant and avoiding fines, and it can help you set up your business to meet the requirements of different states, including sunny Florida....