It’s that time of year again! Time to file your taxes. For many college students, this may be the first time you’re filing taxes on your own. And let’s be honest, taxes can be confusing. But don’t worry, we’re here to help. In this blog post, we’ll give you a basic overview of what you need to know about filing your taxes as a college student.
1. You may not have to file a return
Depending on your income and filing status, you may not have to file a return at all.
If you made less than $12,550 in 2021, then you are not required to file taxes. But even if you’re not required to file, there are still benefits to doing so—namely, you may be eligible for a tax refund.
Use the IRS Tax Tables to see if you need to file. Even if you don’t owe any taxes, you should still file a return if you’re eligible for a refund!
2. Your parents might still claim you as a dependent
According to the IRS, your parents can claim you as a dependent until you are 19, but once you’re a student, that dependency status can be extended until you’re 24.
If this is the case – you can still file taxes, but you need to indicate that someone else can claim you as a dependent on your tax return. Furthermore, you can’t claim any credits or deductions your parents are already claiming on their return.
So you’ll want to ask your parents if they are claiming you as a dependent, that way you can make the appropriate designations if necessary.
3. You can file your taxes for FREE
Filing electronically is the easiest way to file your taxes and even better – the IRS offers free e-filing for those who qualify. For people with very simple returns (for example a single person with just one or two W2s) then even the popular tax filing software like Tax Act and Turbo Tax have a free option.
Plus, you’ll get your refund faster if you e-file and choose direct deposit. Win-win!
4. You can deduct certain educational expenses
If you’re paying for college yourself, you may be able to deduct certain educational expenses on your tax return. This includes tuition, fees, books, and supplies. Check out Publication 970 from the IRS for more information.
5. You might be eligible for certain tax credits
There are a number of tax credits available to college students. The most popular is the American Opportunity Tax Credit, which can be worth up to $2,500 per year. Other credits include the Lifetime Learning Credit and the Tuition and Fees Deduction. Talk to your parents or a tax professional to see if you qualify for any of these credits.
6. Don’t forget about scholarships and grants!
Scholarships and grants are not taxable income—so be sure to include them when calculating your total income for the year. This also goes for student loan interest and tuition payments made with money from a 529 plan or Coverdell ESA account (tax-advantaged savings account).
7. Remember, summer jobs aren’t just for pocket money!
If you’re working during summer break, remember that your employer will probably withhold taxes from your paycheck—just like with any other job. So when tax season rolls around, don’t be surprised if you owe money instead of getting a refund (although hopefully it’s the latter!).
8. Need help? No problem!
The IRS has a whole section of its website devoted to helping students with their taxes. They even offer free online filing through the Free File program (see tip #2). And if you need more personalized help, there are thousands of volunteer tax preparers across the country who can help you filed your return for free through the Volunteer Income Tax Assistance (VITA) program.
9. What if I can’t pay?
Don’t worry, the IRS has options for people who can’t pay their taxes in full right away—including payment plans and offers in compromise (which allows you to settle your debt for less than what you owe). The important thing is to contact the IRS as soon as possible so they can work with you on a payment plan.
10. Keep good records!
Be sure to keep all documentation related to your taxes in case you’re ever audited by the IRS (it happens). This includes W-2 forms from your employers, 1099 forms (if you’re self-employed), receipts for charitable donations, tuition payments, etc.
Last but not least…have fun!
Just kidding… sort of. While doing your taxes may not be the most fun thing in the world, it’s important to take care of them nonetheless. Just think of it as another step towards adulthood. And who knows? Maybe next year you won’t have to ask your parents for help 😉