Major life milestones often have a major tax impact. Changes in your marital status, having a baby or adopting a child can have significant impact on your taxes. This is the place to ask questions about dependents, real estate, and other various scenarios that play a significant role in what taxes you pay.
04-17-2018 10:10 AM
My child received more scholarships than their qualified education expenses as reported on Form 1098-T. My child took the excess monies refunded by the university and opened a college savings money market account to be used for future qualified education expenses to help pay for the reminder of their college education. Is this excess money considered taxable this year even though it will be used for qualified education expenses in future tax years?
04-17-2018 01:42 PM
Yes. The scholarship and expenses are taxed in the year received, you can't carry them to a future year. On the bright side, when she uses them for qualified expenses in future years, she may be able to consider the amount paid with those funds for a tax credit.