Holding a part-time or full-time job as you complete your degree doesn’t just mean more work on a day-to-day basis. It also means that come tax season there’s one more thing to worry about.
You shouldn’t be discouraged, though. Filing taxes as a college student doesn’t have to be as daunting as it sounds.
There are several ways that you can stay on top of your filings and even get the most back possible with the right combination of research, effort and time. Here’s how:
Start early
Even though you may not have your W-2 quite yet, There are several reasons why you should start looking at your taxes as early as possible. For one, taxes are one of those things that always requires double checking before you send them out. If you wait until the last minute, you’ll likely have a few mistakes in your work. Moreover, if you’re in the market for free aid or advising, the longer you wait, the longer the wait will be for those services.
File
Often times it’s as simple as that. Though HR Block’s recent “Get Your Billions Back” ads may seem like they’re only directed at those with careers or high-cost investments, the truth is you have nothing to lose by filing for a tax return and everything to gain. Don’t fall into the trap of thinking you haven’t made enough to get a return, or that your return will be so small that it’s not worth filing for.
Leverage your status
There are several ways that students can receive breaks from the government for their higher education aspirations. Three of those to check out are 1) the Hope Scholarship Credit, which can give you up to $1,500 in tax relief during your first two years of college 2) the Higher education expenses deduction, which reduces the amount of income that is taxed and 3) the Lifetime Learning Credit, another credit that reduces your tax load, this time up to 20% of your tuition and $5,000 total.
Talk to your family
It’s important to understand your family’s financial situation before diving into filing your taxes, as this can often be the most convoluted part. Be sure to sit down with your family prior to filling out your taxes and ask questions such as 1) am I still a dependent? 2) Do I plan on using a tax credit? and 3) who would benefit more from a credit or deduction?
Remember that the value of a deduction (for example, one of those mentioned above) increases with your tax load. This can make it much more valuable to someone in the 35 percent bracket (like your parents) than someone in the 15 percent bracket (like a student), so it’s important to really talk out this decision.
Don’t do it alone
As we said in the intro, filing taxes on top of school and work can be overwhelming–especially when it’s your first time, and even moreso when you have to go at it alone. And with so many different routes one can take regarding credits and deductions, it’s hard to know which way is up. Don’t be afraid to reach out to your school’s financial resources or ACI Specialty Benefits’ student experts for advice or additional resources regarding your finances.
Want more help deciding on a career path? Just ask. ACI is on Twitter at @ACISpecBenefits or on facebook,Google+, Pinterest, or YouTube. Also feel free to contact ACI Specialty Benefits at (800) 932-0034 or email info@acispecialtybenefits.com
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