How do taxes work for college students with scholarships?

I'm a current high school junior trying to understand how taxes will affect me if I get scholarships in college. Do I have to pay taxes on scholarship money, especially for study abroad programs?

I'm glad to see you're planning ahead and thinking about the financial implications of scholarships. In short, scholarships, fellowships, and grants used to pay for tuition and fees, or for books, supplies, and equipment required for your courses, are generally tax-free. This applies whether the scholarship is domestic or for a study abroad program.

However, any portion of the scholarship that covers other costs, like room and board, travel, research, or clerical help, or if it's a stipend for teaching or other services required as a condition of receiving the scholarship, are considered taxable income. This portion of taxable scholarship or fellowship income would need to be reported on your tax return.

The Internal Revenue Service (IRS) provides more detailed guidelines on taxable and non-taxable scholarships in their Publication 970 - Tax Benefits for Education. Please consult this or a tax professional if you need precise guidance, as tax laws can be complex and unique to individual circumstances.

Remember, it's always a good idea to keep thorough records of all scholarship or grant money received and how it was used, as this information would be helpful if you're ever audited by the IRS.