Things All College Students Should Know Before Filing Taxes
Taxes Must Know’s
You just landed your dream job and you’re looking forward to getting some moolah to tuck away for next spring break or a generous shopping excursion. But wait, isn’t there something you’re forgetting? Or maybe, you began interning last year and your parents are starting to mention a certain word more and more… Here’s everything you need to know about filing your taxes as a college student.
Once you start filing your own taxes, you will need to keep records throughout the year, though. There’s no way you’re going to remember a donation you made last January or February, so consolidate all that information into a paper or digital file and keep adding to it! For example, you may have unreimbursed expenses from your university or job or receipts showing how much you spent on textbooks, utilities, etc. throughout the year. If you make charitable donations, that qualifies you for a tax deduction, but you need to provide qualifying documents showing you actually made the donation. By the time tax season rolls around, you should have all the information you need.
Deductions and credits
We’re all broke college students, so when it comes to paying taxes, getting a refund makes a big difference. Some definitions first: deductions lower the amount of taxable money you owe, and credits directly cut your tax bill. You should refer to the official IRS website to find out specifically what you may qualify for. For example, there are tax benefits for education, so if you are using some of your income to pay for college, then the amount of money you owe in taxes may be reduced. As a helpful tip, you can use the IRS Interactive Tax Assistant Tool to check if you’re eligible for credits and deductions. It’s a 25-minute process that’s pretty similar to those college tuition calculators you may have used back in high school.
Understanding your W2
Did you know W-2 stands for Employee Wage Report form? The W-2 form is issued from employer to employee by January 31 and tells the IRS how much you earned and how much was already deducted for taxes, Social Security or Medicare. If you’ve never seen a W-2 before, familiarize yourself by checking out this sample W-2. A copy of your W-2 must always be included when you file your tax forms, whether you are sending in your forms online (in tax jargon: e-filing) or physically mailing your tax forms. Always double-check whether your Social Security Number (SSN) and the company’s corresponding information is correct.While filing taxes may sound tedious, it’s just another part of adulthood, and you may be surprised to find out how much it pays off (literally). So do your research, get advice from your family and friends, check-in with an expert if you can, and definitely do not procrastinate when it comes to filing your tax return!
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