The IRS Publication
970 (pdf) publication explains tax benefits that may be
available to you if youa re saving for or paying education costs
for yourself or another student who is a member of your immediate
family. Most benefits apply only to higher education.
This publication is updated every year.
Are Your Education Benefits Taxable?
Many, but not all, types of educational assistance are
tax-free. A scholarship or fellowship is tax-free if:
You are a degree candidate at an eligible educational
institution
You use the assistance to pay qualified education expenses
(e.g., tuition, fees, books, supplies, and equipment). Room and
board and travel are NOT qualified educational expenses.
In general, if you have taxable income from any of your
education benefits and the payer does not withhold enough income
tax, you may be required to make estimated tax payments.
Student Loan Interest Deduction
Generally, interest other than certain mortgage interest, is not deductible on your tax return. However, if your modified gross adjusted income (MAGI) is less than $75,000 (individual) or $150,000 (filing jointly), you can reduce the amount of your income that is subject to tax by up to $2,500 with a student loan interest deduction.
Please see www.irs.gov for additional information
or IRS help line at (877) 829-5500.
Databases of Available Scholarship and Loan
Programs
Loan Consolidation Programs
Information about how to bring together all your educational loans
and manage resources more efficiently.
Massachusetts Medical Schools: Offices of Financial
Aid
