Filing taxes can be a little tricky whether it’s the first time or the fifteenth time. As the filing deadline approaches, the following tips and tricks may help guide you through the painstaking process and leave a few extra dollars in your pocket.
1. To file or not to file. This seems like an obvious first step, but for some students it can be a tricky decision. According to H&R Block representative Steve Moore, if annual income is below a certain amount in the previous year, taxes may not need to be filed at all. To qualify to not file taxes, an individual must be single, under 65, and make under $10,000.
2. Talk with parents. So much of how to file depends on what a student’s parents are paying for. According to Moore, if parents pay for at least half of their students’ expenses, they have the right to claim the student as a dependent in their taxes. Students may still need to file taxes, but their parents will have necessary information to pass on in order to do so.
3.Take advantage of free resources. There are dozens of free assistance resources available to students, and some might be closer than students realize. Beta Alpha Psi, an international honors organization for financial information, maintains the largest student-run chapter, here at BYU.
“We do a program here called Volunteer Income Tax Assistants (VITA),” said Professor Cassy Budd, faculty adviser of Beta Alpha Psi. “Students who volunteer are trained and pass an IRS-sanctioned certification exam. The volunteers sign up for hours during the week and open sign-ups to low-income students and individuals in the community. ”
4. Determine how to file. Before tax software programs can go public they require certification from the IRS, so students can rest easy knowing that their information will be safe with any program. There are filing software options like H&R Block and Turbo Tax, as well as the IRS website. Some are free, and others will charge for their services.
5. Find the form that best suits the situation. If students don’t know the difference between 1040, 1040ez and 1040-A tax forms, they are not alone.
“If you have education credits or children, you can’t use 1040ez,” Moore said. “Most college students will use 1040-A because it provides more room for education credits. If you’re only reporting your income and nothing else, then 1040ez is the way to go.”
6. Have all of the essentials for filing on hand. W2 and 1098-T forms will be the most essential documents when filing taxes as a student. The W2 explains how much was withheld by federal, state and other miscellaneous taxes from paychecks throughout the year. 1098-T forms are tuition payment statements that all students are required to report.
7. Know deadlines and get an early start. The tax filing deadline falls on April 15 every year, but students can begin filing taxes as soon as they have the proper documentation. Employers are required by law to get W2 forms sent out to employees by the last day in January.
8. Avoid common mistakes. Remember that summer job that only lasted three days? When doing taxes, it counts.
“The most common mistake we see from our clients is leaving out crucial source documents,” Moore said. “Be sure to include all W2’s from any job you have had in the past year, or things could get messy come audit time.”
9. Check. Double Check. Then triple check. As a student it is easy to leave out information that may mean the difference between hundreds or even thousands of dollars in returns, so take some time to check with the professionals. A number of tax agencies offer free consultations and can be a valuable second pair of eyes.
10. Hang on to those receipts. After filing taxes, keep a folder or designated location for old receipts used for taxes. In the chance of a tax audit, it will be a life saver.