college

Your Child’s Scholarship: Is it Tax-free or Taxable?

By Alicia Welshimer on July 30, 2020

Posted in COVID-19, Tax and Accounting Desk

COVID-19 is changing the landscape for many schools this fall. But many children and young adults are going back, even if it’s just for online learning, and some parents will be facing tuition bills. If your child has been awarded a scholarship, that’s cause for celebration! But be aware that there may be tax implications.

pink ceramic piggy bank; image used for blog post about determining if a scholarship is tax-free or taxable

Scholarships (and fellowships) are generally tax-free for students at elementary, middle and high schools, as well as those attending college, graduate school or accredited vocational schools. It doesn’t matter if the scholarship makes a direct payment to the individual or reduces tuition.

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Use a Coverdell ESA to Help Pay for School Costs

By Farhana Kassamali on October 15, 2019

Posted in Tax and Accounting Desk

There are several ways to save for your child’s or grandchild’s education, including with a Coverdell Education Savings Account (ESA). Although for federal tax purposes there’s no upfront deduction for contributions made to an ESA, the earnings on the contributions grow tax-free.

billboard painting of a pencil with a pink eraser on the left and yellow middle with black writing "love to learn," for a blog post about Coverdell Education Saving Account

In addition, no tax is due when the funds in the account are distributed, to the extent the amounts withdrawn don’t exceed the child’s qualified education expenses. Qualified expenses include higher education tuition, fees, books and room, as well as elementary and secondary school expenses.

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Tax Credits for Higher Education You Should Know About

By Thang Ngo on September 17, 2019

Posted in Tax and Accounting Desk

We all know the cost for higher education is expensive. The latest figures from the College Board show that the average annual cost of tuition and fees was $10,230 for in-state students at public four-year universities — and $35,830 for students at private not-for-profit four-year institutions.

a group of students throwing their graduation caps in the air in front of a stone building with windows to celebrate available tax credits for higher education

These amounts don’t include room and board, books, supplies, transportation and other expenses a student may incur.

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