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We’ll admit it, being on your own can be awesome. Pizza for dinner whenever you want? Heck yeah! Filing your taxes? Not as awesome. But as Benjamin Franklin famously said, “In life there are only two certainties: death and taxes.” Jan. 19 was the beginning of tax filing season, and even though the deadline isn’t until April 15th, it’s always a good idea to get a jumpstart on filing your taxes. Whether you’re a first time filer or a tax return pro, chances are you’ve got some questions. We asked Christine Kittinger, a real CPA (Certified Public Accountant), what every college student should know going in to tax season.
Getting Started
Q: What should the average college student do to prepare if they are filing for the first time?
A: “Before you file your tax return by yourself, check with your parents. They may still be claiming you as a dependent.”
Q: What resources are available to college students?
A: “I would start with calling the CPA or accountant that your parents use. They have probably known you since you were a baby. They can give you tax tips that are unique to your situation. Also, The IRS website (www.irs.gov) has free resources to help you prepare your return.”
Q: What if I only worked part-time? Am I eligible for a refund?
A: “If you worked as an employee, you probably had income taxes withheld, and you may get that money back in the form of a refund. Look at box 2 of your W2. This is how much you may potentially get back.”
Q: What are some common mistakes to avoid?
A: “Beware of franchised tax offices that offer rapid refunds… make sure to read the fine print of the “rapid refund;” there is usually a very high charge for getting your refund immediately. The IRS will direct-deposit your refund usually within 10 days at no extra charge. You have waited all year for your refund. Don’t rush it. It also serves as a good opportunity to think about your refund and how you want to spend it. For example, maybe you want to start saving money or pay off a credit card bill.”
Q: What if I’m not a resident of Florida? Does that matter when it comes to filing taxes?
A: “You may be attending college in Florida, but your state of residence may be New York. You may have to file state income tax returns for both states. Be sure to double check your home state’s rules.”
Filing As a Student
Q: What is a 1098T?
A: “A 1098T is a form that your college issues to you to tell you how much you spent in tuition.”
Q: Are there any tax breaks available to students?
A: “Yes, there are a few, like the American Opportunity Credit (worth up to $2,500). I would recommend checking out the IRS website to determine if you are eligible. However, if you are a recipient of a scholarship, are on a prepaid plan or participate in a work-study, this can limit the amount of money you can get back.”
Q: What if I have student loans?
A: “The interest paid on student loans is tax deductible, which is something to be aware of once you start paying your loans back.”
Q: What advice would you give to any accounting majors out there?
A: “Try to figure out if you like your tax classes or accounting classes better. As you start looking for a job, employers will ask you, ‘Do you want to go into tax, or audit and accounting?’ and the sooner you know the answer to that, the better. Do some internships in both, and find out your forte! Prepare your own taxes, it will be a great interview topic.”