Re: 1098-T - Tax Liability
posted at 4/1/2012 7:16 AM EDT
In Response to Re: 1098-T - Tax Liability
[QUOTE]In Response to 1098-T - Tax Liability : My question specifically is are there any tax emptions for specific scholarships or grants? If so, is there somewhere I can find a list to check against my financial aid package? Thank you
Posted by Simon24262[/QUOTE]
There is no such list. Unfortunately, the general rule is that if you come out ahead, economically, and there is either cash or property (which can readily be converted to cash), you are subject to tax on the improvement in your possition.
If paying the tax is too burdensome, you can request a payment plan from the IRS. Interest will apply to the "loan" from the government and you will pay an up front fee to get the schedule set up with them ($ 105 if you are going to send them monthly checks or $ 52 if you allow them to automatically take it from your account each month), but if the amount owed is under $ 10,000 AND you will pay off the balance within 3 years, the approval is automatic. Use a Form 9465, which can be submitted with your return, to make the application. Until the balance is paid off, you MUST be in compliance with the tax laws - timely filing your returns (including legitmate extensions) and timely paying your taxes (tjhis tyupically means no penalties).
Hope this helps in preparing your returns!
Mark H. Misselbeck, C.P.A., M.S.T., Tax Principal
Katz, Nannis + Solomon, P.C.