Private College Student Loan

Must I include my College Funds/Loans in parents Income Tax Forms?

I'm 18 as of now and can't find a job due to the economic crisis. I am going to college as a full time student. I am at a private college as a freshmen. However last semester I received $2400 in college refund but all that was spent on insurance, school computer and school formal clothing which is necessary. Now for this coming weeks refund I'm expecting to receive another $2400 or so. Important side note is that most of this money is a loan under my name. I maxed out my loans to $5500. I receive, Pell Grants, Cal Grants and Federal Loans. My father is the only one to work in the family. We are a family of 5. He makes about $37k a year with 2 jobs. Yet he is always "broke" due to bills and cost of living. I'll be placed as a dependent this year again on his tax forms. The thing I am wondering is if it'll be necessary to include my education costs in his tax forms? I'm hoping of this not effecting his tax refund negatively because I am in need of a car to commute to school and work. If he can get back a descent amount of money he will help me purchase a descent vehicle such as a Honda Accord to save on gas. Right now i'm constantly on job alert to pay my father back for the vehicle. So must I include my college grants/loans in his income tax forms? How will that effect the refund outcome? Please only professional responses. Thanks in advance!

Public Comments

1. Your income would never go on your father's tax return. Federal student loans are not considered income so they are not reported. Assuming your total grants and scholarships were not in excess of your total education expenses, those grants and scholarships are also not considered income and are not reported. Any amount of eligible educational expenses you paid with loan proceeds our out of your own pocket will likely give your father some sort of a tuition and fees deduction or education credit. When your get your 1098-T in the mail, be sure to give it to your father so he can claim the expenses on his tax return.
2. Student loans are not taxable... and the only time a grant is taxable is if were spent on the items that the IRS does not consider valid education costs (their website has a list of expenses). Since most of your financial aid is loans, I would assume that your loans were the refund. Look at your total financial aid, your total tuition/fees paid and determine if your entire refund was from loans. If so, then this is not claimed. However, since your parents can claim you as a dependent, they can also claim an education credit -- this is a benefit to your parents. When you get your 1098 from the school, give it to your parents -- they will need the information. It will not negatively affect their taxes... it will reduce any tax liability and should give some refund, depending on how many of your school expenses were paid with loans (this doesn't count the refund that you spent on insurance, clothing, computer, etc -- unless you purchased these items from the school).