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Welcome to Part 2 of the Filing as a Series!

This series will go through the tax season and will cover tax preparation for different life stages and occupations.

I will cover types of income, tax deductions, tax credits, filing requirements, new tax law impacts, tax tips, tax forms, how to file and preparation costs for life stages and occupations. Check out the whole series. 

Life Stage

College Student

18 to mid twenties

College students can be any age of course, but this post will focus on full time students with part time income. 

Income Types

Income from a job as a waiter, resident assistant, camp counselor, sales associate, cashier, lifeguard, paid internship and so on. This type of income is typically reported on a W-2.  Sometimes it can be on a Form 1099, but it is not as common.

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Form W-2:  This is your wage statement.  It states your wages and withholdings for the year. You will receive this from your employer in January. Keep this sucker! Don’t lose it. Your employer will send a copy of this to the IRS. Soo it is very important that you report this on your Form 1040.

Form 1099: This will report your self-employment income, interest income, dividend income and more. 

You may also have investment income, like interest or dividends, that would be reported on a separate Form 1099 with your SSN.

Scholarships: They are non-taxable if they are used for educational expenses – tuition, books, computers, but not room & board.  Also, if the scholarship is in exchange for services then it is taxable. Scholarship information will be provided on your Form 1098-T. 

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Tax Deductions

A typical college student will not be able to itemize deductions and will use the standard deduction.  

If you’re not “typical” and you own a home or have high medical bills for the year you can  Learn more about itemized deductions here.

Student Loan Interest Deduction: You can deduct student loan interest up to $2,500. This deduction starts to phase-out when your income is above $65,000. It’s a super easy deduction, if you paid interest on a student loan. Tax software like E-file.com or TurboTax will be able to walk you through entering the needed information for this deduction.  

TurboTax Deluxe Edition searches for more than 350 tax deductions and credits. Start today.

Tax Credit

  • American Opportunity Credit
  • Lifetime Learning Credit 
  • Tuition and Fees Deduction

These are three credits you can look into that relate to your education expenses. 

You can check out this article that explains each credit in depth. 

MOST of the time your parents will be the ones to claim these credits. If your parents can claim you as a dependent they can use these credit.

Not sure if you are a dependent? The IRS has this very handy interactive tool on their website to determine status. Check it out- it only takes a few minutes to complete.

Why would your parents take these credits? Well, are they paying your tuition and do they have a larger tax liability? If yes, then it may make sense for them to take the credit. Make sure you discuss this with them and make an educated decision on whom will claim the credit. Both you and your parent should not claim a credit for the same education expenses, okay? Okay. That would be a big ole red flag to the IRS.

TurboTax for Students: When you file with TurboTax this year we do the hard work for you by giving you a FAFSA friendly view of your taxes that you’ll be able to print. Learn More.

Filing Requirement

A college student must file a tax return if any one of the following are meet. 

  1. Unearned income above $1,050. This is income from investments like dividends or interest.
  2. Earned income above $6,350. Meaning you worked for this income. 
  3. Gross income is greater than the larger of $1,050 or earned income (up to $6,000) plus $350
  4. Income from self-employment is more than $400. This is income from a 1099. 

Even if you do not have a filing requirement, you may want to file to get a refund of your federal and state withholdings. In most circumstances, college students normally get most of their withholdings back as a refund.

New Tax Law Impacts

Check out this article for tax law changes that could effect you, like lower tax brackets and larger standard deductions.

Check out 6 Ways the New Tax Law could Impact You. 

Here are two changes that could potentially impact college students specifically.

  • For the 2018 tax year, you can no longer use personal exemptions for yourself or any dependents. So you don’t have to worry if your parents claimed you on their tax return.
  • You can no longer write off any moving expenses. 

Tips

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Tax Form

Form 1040. 

TurboTax Free Edition. $0 Fed. $0 State. $0 to File. Start Now!

Tax Preparation

I am totally confident you can file your tax return all by yourself. 

Most tax prep software will walk you through all the right steps and guide you on the whole process!  You just have to make sure you keep your tax documents organized. I would suggest preparing your return once you have your W-2 and any other tax document you expect to recieve. 

Your employer is required to provide your W-2 by Jan 31st. The IRS starts accepting tax returns around this time as well. So it’s the perfect time to file your return!

In most cases, you can receive a refund within 2-3 weeks from the IRS. About a week after that you normally receive your state refund. You can always check the status of your federal refund below:

https://www.irs.gov/refunds

If for whatever reason you are thinking about extending your tax return, Check out my article on filing extension.

Preparation Cost

$0-$100

On most tax prep software you can file a super basic federal and state return for free. If you just have W-2 income you can use TurboTax or E-file.com for free

If you have a W-2 or 1099 income and plan on using any deductions or credits then you would have to choose one of their paid options. 

The next step up from TurboTax’s free edition is their deluxe edition. With this link you can get the TurboTax Deluxe Edition for $39.99 (regularly $59.99). Remember you will also have to buy the state package as well, which is another $39.99.  If you have investment income, rental property or own a business you will have to use the either the Premier or Self Employed Editions. 

The next step up from the E-file.com free edition is their deluxe software. With this link you can get the E-file.com Deluxe Edition for $17.50 (regularly $24.99). Remember you will also have to buy the state package as well, which is another $25use this link to save $6.  If you have investment income, rental property or own a business you will have to use their Premier software for $45.99.

Bonus Tip

You are able to start now for free with either program, and go back later to actually e-file your return!  If you have your tax documents handy you can go ahead and check out your refund. 

Thank you for stopping by and checking out my Filing as a Series. I sincerely hope you learned something new! Let me know what you think 🙂

TurboTax for Students: When you file with TurboTax this year we do the hard work for you by giving you a FAFSA friendly view of your taxes that you’ll be able to print. Learn More.

Coming Soon…filing as a ->

  • Single Adult
  • Couple
  • Parent
  • Divorcee
  • Blogger
  • Fitness Instructor
  • Multilevel Marketing Consultant
  • Homesteader

Limited Time Offer: Save $20 on TurboTax Deluxe, now only $39.99. Start Now!

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This blog is for informational purposes only. This is not intended to be personalized tax, legal or accounting advice.  You should always receive tax advice from someone who is familiar with your unique situation


Want more tax tips – check out my free tax cheat sheets!


 


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