Surviving College and Tax Season: 7 Tips for Students
***See an updated post about SnapTax here. SnapTax is no longer free.***
I know doing taxes is way down on any college student’s long list of to-dos – right behind studying, having a beer with friends and sleeping.
But part of surviving college involves having enough cash to pay for that beer (I mean buying books). So here are seven survival tips for any college student who is struggling with whether or not you should file and what will help you get the biggest refund possible.
1. Should you file? Despite how many other things are on your to-do list, filing taxes should be one of them, especially if you can check yes to any of the following:
- You earned wages or a salary for the current tax year.
- You earned tips.
- You earned “under the table” or self-employment income that exceeds $400.
- You earned dividends from stocks and other investments.
- Earned interest from checking or savings accounts.
- Used scholarship, fellowship, and/or federal grant funds to pay for expenses other than tuition and required books.
- You are a non-resident or international student here on a visa.
2. Loans and scholarships. The Free Application for Federal Student Aid, or FAFSA form is one way to get loan money. But the key is to do it early. Financial aid is partially given out on a first-come, first-serve basis, and we all know there aren’t unlimited funds from the government. And even if you think you won’t qualify for any aid, filling out this form is often the first step to applying for many types of federal loans, state grants, and college scholarships.
3. And speaking of scholarships. One of the Web sites I frequented as a college undergrad was FastWeb. The free site lists more than 1.5 million different scholarships easily broken down by type and category.
4. Use your iPhone. Yes, this is a shameless plug for TurboTax’s free iPhone app, SnapTax (now 19.99). But come on, when something is this cool, easy to use, I can’t help but plug it. And when I say easy, I mean it. One of my coworkers even posted a video of their dog filing taxes using the iPhone app.
5. Moved it? Claim it. The fact that the average college student spends around $11,000 a year on tuition, room and board, means that many students will need to get full-time jobs to pay for college. So for those students who are planning to go long distance to school, and work full-time, don’t forget to claim your moving expenses on your taxes. There are some stipulations however. Like, you must work full-time for at least 39 weeks during the 12 months following the move, and you must be moving 50 miles or more away from your home address.
6. Recent grad looking for work. At Cal Poly University we were required to do an internship to graduate. While it was a great way to get your feet wet in the career world, I remember being frustrated that this was required of us to get the degree. But shortly after the internship I was offered a part-time job from the paper I was interning at. So when I gradated and was looking for full-time work, I remember thanking my alma mater since that meant I could deduct the cost of resume printing and travel.
So for you grads out there who are ready to hit the job market full-time and are lucky enough to be already working part-time in your new field, don’t forget the write-off.
You can deduct:
1. Employment and outplacement agency fees.
2. Costs of typing, printing, and mailing copies of your resume.
3. Travel and transportation expenses if you have to travel for an interview.
7. Where’s my refund? I know most college students have little to no income, so students need to make sure they don’t throw away the little money they do make. For students who aren’t claimed on their parent’s income taxes and make less than $65,000 a year, don’t forget you can deduct up to $4,000 for qualified education expenses. These expenses can include tuition and mandatory fees but may not include expenses paid for room, board, or books. And if you took out a private education loan or a federal PLUS loan to help pay for tuition, room and board, or books and supplies, you may be able to deduct up to $2,500 of the paid loan interest.
There is also a new deduction called the American Opportunity Tax Credit. For undergraduate college education expenses, students can receive up to $2,500 in tax credits on the first $4,000 of qualifying educational expenses. However, unless congress decides to change this, the tax credit is available until the 2010 tax year.