Education & Taxes:

College Scholarships

As many college students have found out over the last few years, the tax laws aren't what they use to be. Now it all depends on whether you have a degree or not and what you need the money for.

If you are not pursuing a degree, then get ready to fork the money over to the IRS because everything from the scholarship to the fellowship income you received is taxable.

If you are planning to get a degree then everything except room and board is tax exempt. Any money you received for doing your research, teaching, or providing any services to the university or institute is taxable.

Books, supplies and equipment that you purchase as minimum requirements for your course are tax-exempt. But if you are in a video editing class, and the professor suggests getting video camera to help better acquaint yourself with the craft, the video camera you buy for that course through your scholarship money is not tax exempt. Any equipment that you buy as a recommendation from the professor is taxable because it is not part of the minimum requirement.