Jul 26, 2024 Current Resources

5 Things College Students Need To Know About Filing Taxes

(TheDailyCurrents.com) – Young college students are constantly faced with some new problem or situation to navigate. From balancing school, work, and a social life, to applying for loans, grants, and scholarships, “adulting” is often overwhelming, especially when it comes to finances.

One area, in particular, may be a challenge: taxes. You aren’t alone, even seasoned taxpayers find the process overwhelming at times.

Being a student adds an extra layer of confusion. Are you supposed to file? Are you still a dependent? Do you have deductions? What if you don’t have a job or are already paying off student debt? The following are some basics to keep in mind. It is always best to consult a tax professional if you have questions about your specific tax situation. If you meet the requirements you may file directly with the IRS for free. Even if you don’t, there are several services that are low-cost or no-cost.

Do You Need To File Taxes If You Are A College Student?

If you worked in 2022, are single, and earned more than the $12,950 standard deduction, then yes. Even if you didn’t earn that much, you would still want to file as you may qualify for a return based on federal and state taxes you paid out of each paycheck. You will need to claim any income from your employment, self-employment, investments, or other income.

You will want to determine whether or not your parents may claim you as a dependent before you file any taxes.

Can Your Parents Claim You On Their Taxes?

Parents can claim their children as dependents until age 19. If you are a full-time student, they may claim you until you turn 24. If you are employed and you support yourself or provide more than 50% of your own support, or if you are only in school part-time, then they may not claim you as a dependent.

For example, if you are not living at home and you are earning your own income, you are most likely not a qualifying child, even if your parents are paying for some or most of your education. However, they may qualify for some tax credits, even if they can’t claim you.

Are There Any Kind Of Tax Credits For You Or Your Parents?

Your Parents Could Qualify for the American Opportunity Credit

This credit could be up to $2500 if they qualify and can include expenses such as textbooks, supplies, and tuition. Even if your parents are unable to claim you as a dependent, it’s worth it to see if they qualify for this credit.

You Or Your Parents Could Qualify For The Lifetime Learning Credit

This credit could be worth up to $2000 for qualifying tuition costs from an eligible school. You can’t claim both the American Opportunity Credit and the Lifetime Learning Credit. It has to be one or the other. In order to apply for the Lifetime Learning Credit, you must receive form 1098T Tuition Statement and submit form 8863. There are income requirements to qualify for this credit.

What Form Should You File For Your Taxes?

In most cases, you will file using a 1040 form, but if you are self-employed or an independent contractor you will receive a 1099 instead of a W-2. It is important that you claim all earned income and income from other sources such as investments.

A tax professional or tax software is the best way to do your taxes, particularly if you have questions about who can claim you as a dependent, or if you have multiple deductions, credits, or income from sources other than W-2 employment. If you are a taxpayer and your adjusted gross income is less than $70,000, you may qualify to file your taxes for free on IRS Free File.