College student filing taxes...what's taxable income?

I have a scholarship and some pell grant that pays for all of my tuition. I also live on campus. For my taxes, I was told that the pell grant is not taxable. So do I only put down the scholarship money that I didn't use for my tuition and books on my tax forms? If you don't report taxable income (mainly because you're unsure), what are the consequences?? I don't know anything about taxes... So this is probably a dumb question. But is taxable income a good thing? One of my coworkers said the bigger the number, the better. But my boyfriend's brother is an accounting major and he said that the smaller the number, the better. I'm confused...