This year’s tax return season is currently underway and will run until April 18th, but for many college students this process is often viewed as overwhelming or confusing as a whole.
However, the procedure of filing a tax return can be very simple and painless once receiving the proper information regarding the various elements that impact an individual’s return.
David Haber, a senior real estate student, said, “Tax returns have always seemed like a challenging task for me personally and most likely most college students. It is so helpful to be able to get an understanding of the overall process when you are young and still in school, since it’s something you will have to complete your entire life.”
Personally, I was fortunate enough to receive an overview regarding the procedure of filling out a tax return from Monmouth University’s very own Professor Stives of the business school. After Professor Stives’ presentation, I feel that the knowledge I learned should be spread to other students seeking information regarding tax returns.
When beginning to fill out a tax return a college student should determine the correct form that fits their personal situation. Most commonly students will find themselves filling out either tax return form 1040, 1040A, or 1040EZ.
As to where to fill out a tax return Professor Stives stated, “Websites such as TurboTax and other popular resources can be beneficial when students are looking to complete their returns. Students should select to receive their returns online so they can get their money much faster as opposed to waiting for the check to process in the mail.”
The next step of the process is to determine if you should file as an independent or with your parents. There are conditions that must be met in order for your parents to claim your income in their tax return.
The following are some of conditions to file taxes with your parents: if you are under 24, a full-time student, your gross income for the year was under $10,150, and lastly you are not filing a return or a joint return.
Most students question what exactly qualifies as taxable income. A simple way of answering is this question is that any job that has wages, salaries, and or tips is taxable. However, self-employment income is also taxable.
Examples of this type of income would be babysitting or an online business. Basically any job that you may do without technically working at a place of employment. Lastly, investment income such as, interest and dividends received is also taxable income.
A college student’s personal finances tend to be tight. Getting into the habit of saving is beneficial during a student’s four years. Tax benefits, breaks, or deductions as they are commonly referred to allow one to deduct select costs and expenses from your total income.
They are sums of money that are added to your tax refund or subtracted from the final amount of tax that you owe. Also, there are two types of education credits that you can claim on your tax return, which are the refundable American Opportunity Credit and the Lifetime Learning Credit.
Other than claiming tax credits and tax deductions there are two other ways students can save money on taxes. One being exclusions: tax exclusions are sections of your income that are not required to be included in your overall gross income on your personal return.
The most common forms of non-taxable income for college students are scholarship funds and grants. The second method is opting for savings plans. There are two unique types of savings accounts that provide tax benefits to students: Coverdell Educational Savings Accounts and Qualified Tuition Programs.
Overall, tax returns are a mandatory procedure if you are currently employed or have made any form of taxable income over the last year.
Matthew Spinelli, a communication student, said, “His knowledge about the process of tax returns was absolutely outstanding and I’m so happy he came and spoke to us about such an important topic that me and along with other students will greatly benefit from in the near future.”
Having the knowledge of how to file your taxes is an essential skill that will be used throughout your life. Filing your own taxes may seem like a daunting task, but once you get started it really is quite simple. Hopefully, these tips will help ease your nerves during tax season.
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