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What category to use for academic scholarships? RRS feed

  • Question

  • I'm going back to college and was granted a $500 scholarship to help offset the cost.

    My school didn't apply it to my bill, they just deposited it into my checking account.

    What category would be applicable for this?

    For the time being I just created a new Income category called Scholarships but I'm curious how others have handled this.

    Thanks!

    Thursday, January 9, 2020 11:50 PM

All replies

  • Congratulations on your scholarship.

    I use an antique version of Money (MM 2000 International English) and for all I know the way Money handles 'Categories' may have changed over time.

    Think of whatever Categories you have now as the default set. You could delete the lot and create a whole new set and 'Money' would be happy. In MM2000 you can have any number of subcategories within any particular category.

    I have a Category called 'Other Income' (in addition to 'Wages' and 'Dividends' and 'Pensions') and I would include Scholarships as a subcategory here.

    One of the beauties of Money is that you can change names and shuffle things around, usually quite easily, so nothing to worry about here. Once you get into Investments it is important to identify Shares as Shares and Mutual Funds as Mutual Funds ~ as far as I know you can't correct the 'Type' if you belated realise you got that wrong initially.

    Teabag 

     

    Friday, January 10, 2020 8:57 PM
  • Generally, scholarship money is tax-free if it meets the following requirements:

    • You’re pursuing a degree at an eligible educational institution.
    • You use the scholarship or fellowship to pay qualified education expenses.
    • The scholarship funds aren’t more than you’ll need for qualified education expenses.
    • It’s not designated or earmarked for other purposes — for example, room and board — and doesn’t require that you use it for non-qualified education expenses only.
    • It’s not considered payment for teaching, research or other services.

    If so, I would record it as a negative Education - Tuition expense.  If your scholarship is taxable, I would keep the new Scholarship income category, and assign the appropriate tax category to it.

    • Proposed as answer by ameridan Saturday, January 11, 2020 3:54 PM
    Friday, January 10, 2020 9:06 PM