Are Scholarships Taxable?
Hi Friend,
Happy Valentine’s Day! February is an excellent month to treasure your loved ones and your family’s finances.
Completing the Free Application for Federal Student Aid (FAFSA) is an important first step when figuring out how to pay for college. The new simplified 2024-25 FAFSA “soft launched” on Dec. 30 after a three-month delay and a bumpy start, but the new FAFSA form is now available. Students should submit the FAFSA to meet each college deadline, even though the Department of Education has reported another delay. The FAFSA information will now only be sent to colleges in March. Colleges will have a crunched timeline to send out award letters and may need to push out decision deadlines.
While scholarships are typically seen as free money, there are situations where they must be reported as taxable income. College students or recent graduates that received a scholarship may need to pay taxes on it. Understanding the potential tax implications on scholarships is an effective way to avoid surprises this tax season.
If you have any questions about filing the FAFSA, scholarships, or want help starting your family’s college funding plan, sign up for a complimentary consultation today!
– Trixie
Millions of College Students in Limbo After Aid Application Information Is Delayed Until March
U.S. colleges and universities won’t receive students’ applications for financial aid until at least early March, the Education Department said Tuesday.
The delay is the result of the department’s decision to fix an error in how students’ aid eligibility is calculated. The fix is intended to cover students entering college for the 2024-25 academic year.
Scholarships: Understanding the Tax Implications
As tax season unfolds, it’s important for college students and recent graduates to organize their financial documents and understand their potential tax obligations, especially if they have received a scholarship in the past year.
While scholarships are often perceived as “free money,” there are specific circumstances that may require reporting scholarships as taxable income.
How to Survive Paying for College Free On-Demand Webinar
Enroll in our FREE on-demand webinar and learn how to calculate:
- Expected Family Contribution (EFC)
- Cost of Attendance (CoA)
- FAFSA and CSS profile
- Public versus private costs
- How you can afford college without jeopardizing retirement
Enroll for free now! Just click the button below!
Westface College Planning is here to help ensure your planning is where it needs to be. Contact us with any questions you might have for the years to come!
Ready for your own success story?
If you’re a typical parent with college-bound students, you’re probably overwhelmed. You want to help your sons and daughters make the right choices and prevent overpaying for their education. You’re not alone! We’re here to help. Schedule your free consultation today – click below to get started!
Catch our free, on-demand webinar:
How to Survive Paying for College
Join Beatrice Schultz, CFP® for our on-demand webinar, where she provides parents with the exact steps that often greatly lower the cost of college, even if there’s little time to prepare.