5 Tax Tips for Students
Being a college student is great in a variety of ways. But one area that you may think is a little confusing and a little intimidating is filing your taxes, however it doesn’t have to be with tax software.
You may have questions about your parents still claiming you as a dependent, making the required amount of money to file, or knowing about potential tax deductions.
When you’re in the zone between a child and a full-blown adult, it’s good to have some guidance about taxes. Take a look at theses 5 tax tips for students to make sure you’ve got your bases covered.
1. Go Ahead and File
Ok, so this piece of advice might be on every other list out there, but it’s important enough to repeat here. No matter how much money you made, even if you think it’s not enough to be required to file a tax return, go ahead and file.
If you received a paycheck at all in 2012, even working part time, you probably had taxes taken out. Even if you didn’t make enough money to be “required” to file, you should still file so you don’t miss out on your tax refund. Not to mention, it’s good practice for the future. Face it, you’re approaching the time in your life where you are going to be responsible for yourself.
2. What’s Your Dependency Status?
Being claimed as a dependent is one of those grey areas for a college student. Should your parents continue to claim you as a dependent, or should you file a tax return yourself?
Sure you might get a bigger tax refund if you take your personal exemption, but that amount may be a small fraction of the amount of tax breaks your parents would receive if they claim you as a dependent for one more year.
One of the great things about software like Turbo Tax is that you can get an estimate without having to pay for it.
3. Become an Expert at Tax Deductions and Credits
You’re in school, you go to class, and you know what it takes to study and be successful. Why not apply those comprehensive study habits to your tax situation?
As you prepare your taxes by answering simple questions using TurboTax, you will learn what tax deductions and credits you’re eligible for. You may be able to claim the American Opportunity Credit as long as your parents don’t claim you as a dependent. This may entitle you to a credit worth up to $2,500
4. Tax Return Rough Draft
Using an outline and writing a rough draft should be pretty common occurrences for college students. It would be smart and inexpensive to apply those same tactics to your tax return. Instead of flying through the tax process, take some time to iron out the kinks and keep more of your hard-earned money.
You could practice with tax software. You can try TurboTax and let it easily guide you through the process and get an estimate before you file. It’s free to practice filing your tax return and it’s free to see which tax credits and deductions you’re eligible for. When your ready to file your taxes, as a student, chances are high that you qualify for the Federal Free Edition; meaning you don’t have to pay to file your federal tax return.
5. Stop the Insanity
And by insanity, I mean stop procrastinating. No matter what your work ethic looks like at college, don’t let procrastination sneak into your tax life.
Instead of waiting until the last minute to file your tax return, you should start early, stay informed, be prepared, and hammer this thing out. And whatever you do, try give yourself three to four weeks before the tax deadline instead of three to four hours. If you do wait, you can still file with TurboTax up until the last hour on April 15th.
You can also conveniently file your taxes from your mobile device using SnapTax. With a quick snap of your W-2 you could file in minutes.
If you have questions, you can talk to TurboTax tax experts who are CPAs, IRS enrolled agents, and tax attorneys while you prepare your taxes.