If the amount of financial aid, grants, or scholarships received exceeds tuition, books/supplies, room and board, etc., how do you accurately report the excess aid as earned income due to it being taxable?
Excess financial aid is reported on the same line as "wages" on your tax return. Attach an explanation to reconcile the amount since it will not be reported on a W-2 like other wages.
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Answered by: Paul S. Carpenter, CPA, is president of Carpenter Capital Advisors in Johnstown, Pa.