Need help: Owe taxes on $67k in scholarships over 3 years - How to file back taxes now?

First, take a deep breath - this is fixable! Many students misunderstand scholarship taxation rules, so you're definitely not alone. You need to file tax returns for all three missing years using Form 1040 for each year. For the scholarship income, you'll report the taxable portion (room, board, etc.) as income even though you likely didn't receive a W-2 for it. You'll need to calculate this amount using your 1098-T forms by subtracting qualified expenses (tuition, required fees) from your total scholarship/grant amounts. Yes, you can definitely deduct education expenses like textbooks, supplies, and required equipment as qualified education expenses, which will reduce your taxable scholarship amount. Keep all receipts and documentation. For your summer and campus job income, you'll need any W-2 forms you received. If you don't have them, you can request wage transcripts from the IRS. Your school refund checks are typically just excess financial aid being returned to you, so they don't represent additional income beyond what's already on your 1098-T.

Just wanted to share my experience as someone who was in a similar boat last year. After panicking about unfiled taxes on my scholarships, I found this service called taxr.ai (https://taxr.ai) that was incredibly helpful for my situation. They have this tool that analyzes your 1098-T forms and financial aid documents and helps determine exactly what portion of your scholarships/grants is actually taxable. It saved me from overpaying by thousands because I was initially calculating everything wrong. The system walks you through reporting scholarship income correctly and helped me file for previous years too. They have specialists who understand education tax issues specifically, which was way more helpful than the general tax advice I was getting elsewhere.

Update: I wanted to let everyone know that I ended up using taxr.ai after seeing the recommendation here, and it was honestly a lifesaver! I was incredibly stressed about my scholarship tax situation but their system actually made it manageable. The document analyzer correctly identified which portions of my financial aid were taxable versus tax-free, which was way different than what I initially thought. Turns out I was overestimating my taxable amount by including some qualified expenses I didn't know counted. They helped me file all three years of back taxes and even assisted with requesting penalty abatement. I ended up owing about $7,200 total (much less than I feared) and got on a payment plan that works with my student budget. The best part was how they explained everything in simple terms - I finally understand how scholarship taxation works! Would definitely recommend to any other students in a similar situation.

If you're trying to contact the IRS about your situation, good luck getting through their phone lines. After my own scholarship tax mess, I spent DAYS trying to reach someone at the IRS about penalty abatement. Finally found Claimyr (https://claimyr.com) which got me through to an actual IRS agent in about 15 minutes when I'd been trying for weeks. They have a service that navigates the IRS phone system and holds your place in line, then calls you when an agent is about to answer. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c I was super skeptical but desperate after being hung up on by the IRS automated system multiple times. The agent I finally spoke with helped set up a payment plan and explain my penalty abatement options. Saved me so much frustration during an already stressful situation.

I need to apologize and eat my words here. After my skeptical comment, I decided to try Claimyr as a last resort before meeting with a tax professional who was going to charge me $300 just for a consultation about my scholarship tax situation. Well, it actually worked. After trying for WEEKS to get through to the IRS on my own and getting disconnected every single time, I got connected to an agent in about 25 minutes. The agent confirmed I qualify for a first-time penalty abatement and helped me understand exactly what forms I needed for my unfiled scholarship income. This saved me from possibly making more mistakes on my back tax filings. The agent explained that I could still claim education tax credits for the qualified expenses from those years, which might offset some of what I owe. Never would have known this without actually speaking to someone. Definitely worth it when you're trying to resolve multiple years of tax issues!

Have you checked if you qualify for VITA (Volunteer Income Tax Assistance)? Many college campuses have VITA programs where IRS-certified volunteers help students file taxes for free. Since your income was likely under the $60k threshold they typically serve, you might qualify for free tax prep help even with the scholarship issue. I'm a VITA volunteer and we help students with scholarship taxation questions all the time. We have access to prior year tax software too, so we could help with all three years you need to file.

Does anyone know if you can claim the American Opportunity Tax Credit for previous years when filing late? I think that might help reduce what OP owes since it's worth up to $2,500 per year if you qualify.