FAFSA financial aid tax reporting - where do student loans go on taxes?

your son should have received a 1098-T form from the school that shows tuition paid and scholarships/grants received. loans dont get reported on taxes but grants/scholarships might if they exceed tuition costs. check his student portal or mail for the 1098-T

This is a common question for first-time FAFSA families. Here's what you need to know: 1. The school should have issued a 1098-T form showing tuition paid and scholarships/grants received. This is usually available in the student portal or mailed to the student. 2. Student loans are NOT taxable income and don't need to be reported on either tax return. 3. Scholarships/grants used for qualified educational expenses (tuition, fees, books) are not taxable. Any amount used for room, board, or other expenses IS taxable. 4. Since your son is filing his own return (even as your dependent), HE reports any taxable scholarship/grant money on HIS return. 5. You may be eligible for education tax credits (American Opportunity or Lifetime Learning) on YOUR return since he's your dependent. The 1098-T information will help determine this. I'd recommend checking his student portal for the 1098-T first, then contacting the school's financial aid office specifically about tax documents if you can't find it.

My daughter was in the same situation last year! The 1098-T is super important - it should show Box 1 (payments received for tuition) and Box 5 (scholarships/grants). If Box 5 is bigger than Box 1, the difference is technically taxable income for your son. He reports it as "Income" on his 1040 with "SCH" written next to it.

student loans are NOT taxable!!! but don't forget about education credits - they can be HUGE! we got over $2,500 back using American Opportunity Credit for our son. you claim that on YOUR taxes since he's your dependent. you need the 1098-T form and keep receipts for books too!

There seems to be some confusion here. Let me clarify the tax treatment of financial aid: 1. Student loans are never taxable income when received. 2. For grants and scholarships: - Amounts used for qualified educational expenses (tuition, fees, required books/supplies) are NOT taxable - Amounts used for room, board, optional equipment, or other expenses ARE taxable 3. Who reports what: - The STUDENT reports any taxable scholarship/grant amounts on their return - The PARENT who claims the student as a dependent can claim education tax credits 4. Education Credits available to parents: - American Opportunity Credit: Up to $2,500 (partially refundable) - Lifetime Learning Credit: Up to $2,000 (non-refundable) Make sure you have the 1098-T from the college. If the financial aid office isn't helpful, try contacting the school's student accounts or bursar's office specifically about tax forms - they handle the 1098-T generation.

We went through this mess last year! Nobody tells you this stuff when your kid starts college! Our tax guy said we needed to report the Pell Grant but not the loans. SO CONFUSING! Good luck!

I spent HOURS trying to get through to someone at the Department of Education last year about this exact tax question. After dozens of attempts and disconnections, I found this service called Claimyr (claimyr.com) that got me connected to an actual FSA agent in under 25 minutes. They have a video showing how it works: https://youtu.be/TbC8dZQWYNQ The agent confirmed that student loans don't affect taxes when received (only grants that exceed qualified expenses do). They also helped me understand which tax forms I needed from the school. Saved me so much stress during tax season!

One thing no one mentioned - if your son had his loans forgiven for any reason, THAT would be taxable in most cases! But just receiving loans isn't a tax event.

wait i just realized something important - did ur son use any 529 plan money? that can affect whether u can claim the american opportunity credit bc u cant double dip on tax benefits!!!

As you work through this, here's one more tip: Keep good records of all educational expenses paid. The IRS can ask for documentation if you claim education credits. This includes: - Copies of the 1098-T - Receipts for required textbooks and supplies - Account statements showing payments to the school - Documentation of any scholarships/grants and what they covered Also, consider whether your son qualifies as your dependent. For education credits, he must be your dependent for you to claim them. The general rule is that if you provide more than half his support and he's a full-time student under 24, he qualifies.

I totally understand your frustration! I went through this exact same confusion when my daughter started college two years ago. Here's what I wish someone had told me upfront: The key document you need is the 1098-T form from your son's school - this will have all the numbers you need for taxes. Most schools post these in the student portal around late January/early February, so check there first. Here's the simple breakdown: - Student loans = NOT taxable (never report these) - Grants/scholarships = Only taxable if they exceed qualified education expenses - Your son reports any taxable financial aid on HIS return - You can still claim education credits on YOUR return since he's your dependent Pro tip: Don't stress too much about the financial aid office - they handle aid, not taxes. The bursar's office is usually better for 1098-T questions. And honestly, most tax software will walk you through the education credit calculations once you have the 1098-T numbers. You've got this! The first year is always the most confusing, but it gets easier once you understand the process.

Just wanted to add one more helpful resource - if you're still struggling to find the 1098-T form, many schools also mail physical copies to the student's permanent address (usually your home address). They're required to send them by January 31st, so keep an eye on your mailbox too! Also, if your son received any Pell Grants, those typically cover qualified expenses first, so they're usually not taxable. It's mainly the "extra" grant money that goes toward room/board that becomes taxable income. One last thing - when you're doing your taxes, make sure you and your son coordinate so you don't both accidentally claim the same education expenses. Since he's your dependent, you get the education credits, but he reports any taxable scholarship income. Good communication between you two will save headaches later!

I'm a college student who just went through this process myself! One thing that really helped me was understanding the difference between "qualified" and "non-qualified" education expenses. Qualified expenses are things like tuition, mandatory fees, and required books/supplies. Non-qualified would be things like room and board, parking passes, or optional equipment. If you're having trouble accessing the 1098-T through the student portal, most schools have a specific section called something like "Tax Documents" or "1098-T Forms" - it's usually separate from the regular financial aid info. You might need to look under "Student Accounts" or "Billing" rather than "Financial Aid." Also, just a heads up - some schools are slow to post these forms, so don't panic if it's not there yet in late January. They have until January 31st to get them out. And if your son received any work-study income, that gets reported separately on a W-2 from the school, not on the 1098-T. Hope this helps ease some of the stress! The whole process seems way more complicated than it actually is once you get the hang of it.