It’s that time again. Between the flurry of the holidays and the energy of spring is tax season, the chance for people, including young people, across the country to organize their finances and prepare their returns.
While the process can seem overwhelming, especially for college students, a strategic approach can go a long way in getting through it quickly and painlessly, which is why the Everest College Phoenix’s Mesa campus is offering tax tips specifically designed for students.
Even if you have filed before, tax season can be a challenge when you are a college student. Many students are juggling coursework, a full-time job and a personal life — so the pressure of filing can be very stressful. With just a few easy steps students can be prepared and file their taxes with ease.
File a tax return
While not everyone is required to file, it is highly recommended that anyone who has received a paycheck over the course of the calendar year report his or her earnings to the U.S. Government. Technically, if you earned less than $5,000 it is not mandatory. However, most students will get most or all of their taxes back if they do. What seems like a hassle at first, might actually provide a convenient financial cushion later on.
Know your status
The decision to pursue an education is significant, and finding a balance between work and school can take time. It is not uncommon for students to rearrange their schedule during stressful periods so they can focus on their studies or pick up extra hours at work when they are carrying a lighter course load. These are changes that could potentially affect filing status. Check with your employer to determine whether they consider you full time, part time or independent. The form you receive from them will determine the form you submit to the IRS.
Additionally, students are encouraged to check with their parents before filing their individual taxes. Many parents continue to claim their children as dependents while they are enrolled in school, which affects the student’s status and, as a result, potential deductions.
Take the time to do your homework
Oftentimes people are so concerned with what they might owe, they overlook what may be owed to them. Higher education is good for the economy, and the government rewards that. There are several items in the tax code that are specifically designed to make college less expensive and more accessible.
Provisions such as the Lifetime Learning Credit and the Hope Scholarship Credit are made available to help you offset the costs of higher education by reducing the amount of your income tax while in school. Also, upon graduation, students who utilized financial assistance may be eligible to deduct their student loan interest once they begin repaying their loans.
Ask for help
Everyone’s situation is different and involves a unique set of circumstances, which is why the Everest College Phoenix Mesa campus urges students to take advantage of resources if they are unsure how to proceed. The IRS website, www.irs.gov, offers a full list of tax benefits for education, as well as information for both national and state returns. Also, advisors and certified professional accountants are specially trained to provide answers to difficult questions, and many offer brief appointments through email or over the phone.
It isn’t always easier to do it yourself and hope for the best. Not only can mistakes be costly, but the added stress and uncertainty can be a significant burden. When given the choice, make sure your peace of mind comes first.
• John Nanni is a financial services professional and adjunct instructor at Everest College Phoenix in Mesa, where he teaches a variety of business and general education courses. He is a native western New Yorker who moved to Arizona in August 1977.