Problem: Jilly (21) is a full-time undergraduate student pursuing an accounting degree at her state university. During the year, she received a $6,000, unrestricted scholarship, reported to her on Form 1098-T rather than Form W-2.
Jilly spent $5,000 of the scholarship funds on her current-year tuition, and she applied the rest to room and board. She also had income from a part-time job, and she is required to file a 2021 tax return. How should Jilly report the scholarship income on her Form 1040?