Two things are always for sure in this life; Death and Taxes. Our focus is on the latter.
As the tax season approaches the corner, everyone will be called to file their tax returns. Even when one is not earning any income yet, it’s still a requirement to file income tax returns.
If you’re still a college or university student, this article will give you great tips on how to file your taxes.
1. Getting Familiar with the Tax process
At first, many students are unfamiliar with the whole tax process. To get more information about this process, students can use the revenue authorities’ websites as they provide some basic information about the taxation process.
Most colleges also provide some free tax assistance through programs such as the Volunteer Income Tax Assistance (VITA). The service is quite free and can be used by students for all types of tax guidance.
The value of these support avenues is felt in the ease that they bring in tax preparation at both the present and the future tax seasons.
2. Take Note of Deductions for your Education
Well, many people go to school, and they frown on it. But this frowning does not last for long until they realize that they can actually get tax benefits from going to school. Any student can opt for specific deductions when filing their tax returns.
The key areas to look for are the earned income tax credits and the education tax credits. The value that these deductions have are felt when it reduces the total tax payable on the paycheck.
In terms of figures, these tax deductions can save you to a handsome amount of $4,000. Hence they should not be overlooked when filing returns.
3. Sign and Date your Return
The most common income tax filing mistake that people make is forgetting to sign and also to date the return. This mistake normally makes the return incomplete and many at times the return ends up not being filed accordingly.
The remedy to this is E-filing of tax returns. With E-filing, the system gets to double check your return hence increasing its accuracy. It also reduces the chance of having an extra audit of returns since most of the returns were done in a sure way.
But all in all, make sure that you have counter-checked your math especially to identify errors of commission and omission. Using of proofreading in the university can also be a good way to double check your return.
Tax experts also point out that most mistakes are purely made from not following instructions, hence make a point of knowing and understanding the instructions beforehand.
4. If you’re a Foreign Student, Do the Same Tax Rules Apply?
In the US, the IRS does not have a preference or separate rule for taxing foreign students, scholars, teachers and exchange students alike. The main thing that’s considered is the immigration status of the foreigner. This could either be:
- Resident alien
- Non-resident alien
- Dual status Alien
The above categories have different taxable incomes, and thus they would be subject to different tax withholdings.
Thus, you might find that a foreign student who has the status of a resident alien may have some tax obligations that are similar to a US citizen. On the other hand, if you’re on a student F-1 Visa, you might be required to file Federal tax returns as a nonresident alien.
The downside is that if you’re in this category, you cannot claim any educational credits for the whole year.
To get more insight into the tax options available for Aliens, the IRS has a publication on its website that focuses on aliens.
5. If You’re Still a Dependent, You Are Not Eligible for Tax Exemptions
Every student has to know their status as far as being dependent on their parent is concerned. There are certain conditions that one has to meet in order to qualify as either a child or relative.
They revolve around the age requirements, full-time student status and the total income of the students. Any student who is still a dependent may not be able to claim any form of exemption.
This applies even when their parents don’t claim the exemptions. In essence, judging by the fact that most students in colleges and universities are still dependents; most of them cannot claim exemptions.
Well, What If You Are Not In A Position To File Your Taxes?
The IRS normally gives a payment plan when one is in no position to pay what they owe. They understand that as a student, you may not have a stable income. In addition, the economy can take a toll on anyone, and since you’re just a novice, you get hit most.
If you’re unable to pay the taxes, just let the IRS know and work with them to come up with a workable payment plan that recognizes your present circumstances.
Be wary of scams
There are frequent and rampant cases of identity theft. The culprit's file tax returns with fake identities. They are rampant especially when tax season has arrived.
Hence, be watchful for that email that looks suspicious or that sweet talking person that tries to get your details via phone. To prevent such cases, just make a point of dealing with the IRS directly. This way you avoid the snares of scammers.
One last bonus tip for university and college students is to keep records of tax returns. At least keep the tax return for three years. Sometimes a new exemption may be introduced and you might need the corresponding paperwork to claim it.
At other times, the IRS might require an audit of your tax return, hence it’s advantageous when you had kept a record of it. In contemporary time, you can store such records in a digital format. You simply scan it and store it on your computer or any other electronic storage device.