Taxes as a College Student: A Comprehensive Guide
Taxes can feel daunting, complex, and confusing. That is why we’ve created this guide, Taxes as a College Student: A Comprehensive Guide so you can navigate the tax season with confidence and clarity. Here are the basics of what you need to know about taxes.
How Much You Earn a Year Matters
Some college students don’t work during school. Some work part-time, and some even work full-time jobs. Whatever your situation is, here is the number you need to remember—$12,950.
If you are a single household and make under $12,950 a year, you are not required to file a tax return. However, doing so may still be beneficial because you might get some money back from the government. This is because your employer still withholds federal taxes from your paycheck and most often, you can get that back. But, you do not have to.
If you are married, that number changes to $25,900.
There are many ways college kids can save money. Read over our The College Student’s Ultimate Guide to Saving to understand more about taxes and being a college student.
There Are Ways to pay Less Taxes
There are several ways you can adjust the amount of income that is taxed. Though this is slightly limited for college students, some of them still apply. Even if they don’t, these tips are very helpful to know for your future.
- Charitable Donations. When you donate to qualified charitable and nonprofit organizations, you can deduct that amount! However, the qualification is that you do not get anything in return for your donation. So, tithing to your church and the market value of things donated (clothes, furniture, etc.) to charitable organizations qualify. Make sure you keep the receipts!
- State and Local Taxes Paid. This number is usually shown on your W2 and is limited to $10,000 annually. Additionally, you can also withhold property taxes that are reported on your 1098 form.
- Medical and Dental Expenses. If the amount of money you paid on unreimbursed medical and dental expense is more than 7.5% of your adjusted gross income, you can deduct it.
This list accounts for deductions you can make on your adjusted gross income, and only includes a few of the ways. If you want to learn more, read what the IRS says.
Tax Credits
Tax credits are also amounts you can calculate to subtract from the tax you owe. Some credits are fully refundable, which means you can get some money back even if you don’t owe any tax! Here are some examples of tax credits:
- Education Credits. If you go to an accredited school, you can qualify for credits on tuition and books. Check the qualifications here to see if you can claim these credits.
- Child and Family Credits. Though this may not apply to you now, it likely will in the future. For every child you have that is under 17, you can claim a tax credit of $2,000 (of which $1,400 is refundable). For every child over 17, you can claim $500 (which is non-refundable). These children do need to be claimed as dependent.
Though there are more tax credit options, these are two of the main ones. After deducting these amounts, the number you get will either be the amount of taxes you owe or the amount that will be refunded to you.
If this all still sounded complicated to you, you are not alone. Let’s talk about what help you can get to calculate each of these numbers.
You Don’t Have to Calculate These Numbers by Hand
You may be overwhelmed by this information—and this hasn’t even covered everything. But the great thing about living in this technological age is the amount of resources available to help you.
You should use a free online filing service, such as Taxslayer or Turbotax. These programs ask you questions to understand your situation and determine which forms you need to complete. It looks through all the tax code to help you maximize your tax return and ensure you pay all the taxes you owe.
Another great resource is free professional help. The Money Success Center on Campus offers a free service to students where volunteers help you fill out your taxes. To use this service, you need to make under $60,000 a year.
Get Ready For Tax Season
Now that you understand some of the basics of taxes, you are more ready for tax season. This typically begins in late January and the deadline is almost always April 15th. Do your taxes early to get your refund sooner and reduce stress.
Taxes will be a constant throughout your life, so make sure you are always learning more about them and doing your best to maximize your savings.