I receive a third-party scholarship of $5,000 per year. My previous academic advisor advised me not to report the scholarship to my school and to keep it. In my first year, I used about $1,000 for school-related expenses, and the remaining amount is still in my savings account.
Earlier this year, my mom and I went to file taxes together, and the tax preparer told me that I didn’t need to report the scholarship since it’s used for educational purposes. However, when I researched online, I found resources indicating that I might need to report it anyway.
I haven’t spent the rest of the scholarship on personal expenses, but it’s just sitting in my savings account. Can anyone provide some advice on what I should do in this situation?
Maybe listen to the worker—they’ve likely dealt with similar situations before. But if you still feel unsure, it might be a good idea to call back and speak with another worker to get a second opinion.
Are you in the U.S.? If the scholarship didn’t cover tuition, books, or certain fees, you should report it. Your tax bracket is probably low with the standard deduction, so you may not owe anything. However, the scholarship organization might report it, and not notifying the school—especially if it’s a need-based scholarship—could have consequences. Some college websites even outline the risks of doing so.
Besides, most schools require you to report all scholarships received, regardless of the source. You would keep the money, but your financial aid package might be adjusted, depending on the school.
Listen, the WORKER literally told you that you didn’t need to pay taxes. Why are you trusting random Internet strangers over someone who does this for a living? If you’re that eager to throw your money away, be my guest, I guess.
I wasn’t just looking at random strangers; I was looking at the IRS website and other scholarship info sites. I got confused by the contradiction between what the worker said and what I read online.