A college student’s guide to taxes
Surrounded by tax forms and questions – filing taxes for the first time is a daunting task. Lee Clarion is here to help you successfully prepare and file your tax return. Here are a few explanations and resources to consider as you prepare for this tax season.
The biggest mistake a college student can make when filing their taxes is not filing. Dr. Michaelia Black, assistant professor of accounting at Lee University, encourages students to file their taxes whether they are a dependent or not.
This raises a few questions. Are you a dependent or an independent? What do these terms mean? Let’s break it down.
According to the IRS, to qualify as a dependent in college one must be a full-time student and under the age of 24 years old, as well as, receiving more than half of their financial support from the parent or guardian claiming them. There are several other tests in addition to these to qualify as a dependent however these are most prominent in relation to college students.
A dependent can still file their own tax return, but the need to file depends on income, marital status and other criteria. The biggest contingency is whether or not you worked a on- campus, part-time or full time job therefore receiving a W-2 tax form. Dr. Black explains that dependent students who made more than $600 or had taxes taken out from a federal, state or local level should file a tax return.
An independent student should also file a tax return – separate from their parents or guardian. A student over the age of 24 who made more than $14,600 is designated as independent, according to the IRS.
After establishing your status as a dependent or independent, one should begin collecting the forms necessary for filing a tax return. Firstly, you will need to access your 1098-T form. Lee University students can find this on Portico. Next, collect any W-2 forms from your employers such as the university or a part-time off campus job, as well as any 1099 forms. This form is less common amongst college students, but is used for self-employment purposes.
Dr. Black also notes students who have worked on campus receive some benefit when filing their return. Student workers avoid some taxes such as Social Security and Medicare.
Another benefit of filing taxes while in school is the opportunity to claim specific tax credits. These special credits include the American Opportunity Credit and the Lifetime learning credit which allows students to claim up to $2,500 per year to offset the cost of attending college.
The 1098-T tax form works in conjunction with these credits – informing the IRS of your education costs and financial aid balances.
Now that you have an understanding of the process, a tax return site is required to complete your return. The earlier one files their return the better, but one should note the deadline is April 15th, according to Dr. Black.
“Not only because you did your return early, it comes earlier, but it actually comes faster. If you do your taxes in February, they may come in two weeks, or if you do it in April, your return may come in two months,” Black said.
Setting up a personal ID on IRS.gov will help you keep track of your information and return throughout this process. You can also access explanations for every tax form on this site.
Another resource for students are free tax sites such as H&R Block, IRS Free File, and FreeTaxUSA. These sites walk users through filing their tax return making it a simple process. Users will be told what forms they need and how to obtain them.
Filing your taxes for the first time is often overwhelming, but hopefully this guide makes it easier. Take Dr. Black’s advice this tax season: “Ask for help! It's okay to ask for help; reach out to someone who’s done it before. Don't think you have to go at it alone.”
