It is tax season, a time during which college students must confront one of adulthood’s unfortunate realities: filing taxes. Between 1098s and 1040s and all their subcategories, students are confused. Financial aid makes things even more complicated.
In February, Nigina Ortikova ʼ22 turned to the Wellesley Class of 2022 Facebook group for help. In the comments, she explained her confusion: “Turbo Tax is considering my Wellesley scholarship as an income and generating [an] insane amount of due payment.” Other students commented with similar concerns.
According to the IRS website, higher education scholarships and grants are non-taxable if they pay for tuition, fees and required supplies. Funds for non-qualified expenses, like room and board, are taxable. This means that the most economically disadvantaged college students, who receive the most financial aid, are liable to pay taxes on tens of thousands of dollars that never go through our hands.
Room and board for the 2020-2021 academic year total $17,772. But since first-year students must live on campus, and residential students are required to use the meal plan, can scholarships covering those expenses be taxed?
“I wish Wellesley could have some sort of tax filing workshop with an accountant present to help guide us as we file our taxes,” wrote Marie Aaronian DS ʼ22.
“No one should pay $300 for lawyers or accountants to do their taxes as a student,” wrote Ortikova.
I asked Kari DiFonzo, the director of Student Financial Services, what services were in place to help students with complicated tax situations. “Unfortunately, Student Financial Services is not able to offer tax advice and we do not currently have any tax professionals to connect students with. I often encourage students to reach out to their local H&R Block or Jackson Hewitt if they do not already have a relationship with a tax preparer,” she said via email.
Full-scholarship students do not have tax professionals.
Aaronian has consulted a tax professional in the past but cannot afford it anymore. “I’m an independent student and with the demands of Wellesley courses, I have to cut back my working hours during the semester,” she said. “After my bills are paid, I don’t typically have extra money hanging around to hire a professional.”
Many of us have tax-related questions that cannot be answered with a quick Google search.
“What type of school supplies, if any, should be itemized and claimed (e.g., books, technology supplies, internet plans, gas receipts if commuting, etc.), and where should they be reported on our taxes? In case of an audit, should we hang onto receipts, and for how long?” said Aaronian.
As for me, I want to know whether required first-year room and board and the meal plan can be considered qualified expenses. After all, at Wellesley, they are required expenses.
If Wellesley wants to support low-income students, it can contract a tax professional to work with students on financial aid. It can explore whether requiring students on financial aid to live on campus all four years would make room and board non-taxable. It can get together a group of alumnae in the tax field to answer questions.
But instead, Wellesley tells its poorest students to contact a tax professional.