Tax Season is Upon Us: Here’s What College Students Should Know
By Jessica Estremera, graduate student, School for Graduate Studies
March 12, 2013
It’s that time of year again! Tax season is here. W-2s and other important tax documents have arrived in the mail. You might be filing hurriedly because you think you’re getting a hefty refund. Or, perhaps you’re procrastinating because you have to pay the federal or state government. Or you’ve blocked it from your mind because you don’t know where to begin. Fortunately for students, there are plenty of ways the government is trying to cut you a break via your tax return.
Undergraduate students, or their parents, if they are claimed as dependants, can claim the Hope Scholarship credit for a maximum of $1,500. This credit applies to the first two years of college only.
Graduate students may file for the Lifetime Credit. This credit allows students to claim 20 percent of their tuition and certain related expenses up to $10,000, for a maximum credit of $2,000. Students who purchased a new laptop, iPad or desktop computer to be used in their higher-education pursuit may claim the costs on their tax returns.
According to the Internal Revenue Service (IRS), if you've taken out a federal or private student loan, you're eligible to deduct up to $2,500 worth of interest paid on the loan as an "above-the-line" exclusion from your income. You don't have to itemize your deductions in order to claim it.
These days there are several ways to file your taxes online. Programs such as TurboTax or TaxAct can ease the tax filing process. Simple state and federal tax return filings start at about $27.99 for basic and increase according to program features. For more comparison, information go to Tax-Compare.com.
The IRS also is offering free federal tax return filing at http://www.irs.gov/uac/Free-File%3A-Do-Your-Federal-Taxes-for-Free.This does not include state filing, which must be done separately.
Students looking to save on filing expenses can participate in the various volunteer income tax assistance (VITA) programs in New York. (Word of advice: The sooner you file your taxes, the shorter the lines will be.) More information regarding the VITA program is at http://www.otda.ny.gov/programs/tax-credits/vita/.
This year’s tax deadline is Monday, April 15. Be sure to file your taxes early in order to complete your FAFSA application, which determines eligibility for financial aid.
Image courtesy of Stuart Miles: http://www.freedigitalphotos.net