It’s that time of year again, when you scramble to find your receipts, anxiously wait for your W-2s and squeal with excitement when you receive your refund check. It’s tax season.
Being a student comes with benefits and breaks when tax season arrives. Students can receive unique tax credits that are part of the American Opportunity Tax Credit.
“The American Opportunity Tax Credit allows eligible students to take limited credit for tuition, required fees and materials,” said Dr. Janet Trewin, accounting professor. “Students will need receipts for each of the expenses they intend to claim, including tuition paid, required books and materials purchased.”
To get the education credits students must have paid for the educational items themselves, and they can’t be claimed on their parents’ tax return.
“Students tend to think of themselves as independent adults and therefore no one’s dependent,” Dr. Trewin said. “This is often not the case, if students are claimed as a dependent on their parent’s return they cannot take the tax credit for themselves.”
“Students will try to claim themselves as dependents when their parents are already claiming them,” said Emily Osborne, an accounting graduate from Atkinson. “A good rule is if your parents pay 50 percent or more of your expenses then your parents get to claim you on their taxes.”
According to ABC news, Americans spend more than $7 billion a year on filing taxes, why not do it for free? Free filing is offered from many sources including the Internal Revenue Service website, which offers more than 25 different free downloads of tax software. Professional tax preparers like H&R Block are doing 1040 EZ forms for free until Feb. 15, and now taxes have gone “smart” with phone applications. Tax “apps” have been created so consumers can file their taxes from a smart phone.
“If you’re looking for a more economical way to do taxes using iPhone tax ‘apps’ or free online software is certainly a cheap way,” Osborne said, “but personally I would have someone do my taxes.”
“I’m more concerned students get the correct refund rather than the maximum refund,” Dr. Trewin said. “Students need to include all their income, including W-2s, 1099s and bank statements.”
School purchases are made all year, and saving receipts for tax season can mean a better refund. Some payments like tuition can be located and printed on the MyBlue website.
“To receive all the deductions and credits they are allowed, taxpayers need to keep good records and keep all receipts that relate to any expenses that are deductible,” Dr. Trewin said.
“Save, and keep track of everything you pay for,” Osborne said. “If you buy supplies for a lab that’s deductible, and so are pens, pencils and notebooks.”
Don’t get stressed about your taxes just yet, you have plenty of time to file, in fact the last day to e-file your tax return is April 18, so gather your receipts and file.