April’s tax deadline prompts first-time filers
February 22, 2010 —
W-2 forms, 1040s, 1098s: what do all these numbers mean? It means that April 15 is right around the corner, and taxes will soon be due.
In college, many students aren’t making much money with the prices of tuition, rent and gas. Wise filers know what information they need and which tax breaks they qualify for.
“Students as a rule will not have as many tax breaks, because returns aren’t complicated and they really don’t have the kinds of deductions to get breaks,” said Jerry Boehm, an SVSU math instructor and professional tax preparer. “Most students can get their taxes to zero because of low income.”
Students whose total income is less than $9,350 will owe no taxes, and they are entitled to a refund of any taxes withheld.
This year, the government is also offering a tax break called the Making Work Pay Credit, which Boehm recommends looking into. If a nondependent student earned more than $6,451 in 2009, the student can claim up to $400 in tax credit. Students don’t need any extra paperwork because the option is right on the tax form.
According to Boehm, there’s a bigger distinction to make.
“The first and most important step,” he said, “is to make sure you know if your parents are claiming you as a deduction or not.” If parents claim a student, he said, then that student does not have to file.
Boehm has seen instances where parents file their taxes, not knowing that their children claimed themselves as independents.
“Whoever files first gets the deduction, even if it makes less financial sense,” Boehm said. If parents also claim a student, the double-filing can create a hassle, with the process needed to amend a filed tax form.
Carrie Crossen, a history senior, said she will file her taxes independent from her parents this year. “[That way,] I know exactly what counts, and [I can] be aware of possible deductions.”
According to Boehm, “The second step to make taxes as painless as possible is to be ready and organized before you file.” The process will run more smoothly if all documents are easily accessible. Students need interest statements from bank accounts, W-2 forms from employers, 1098 tax forms, and tuition information.
“Most students won’t need to itemize because they do not make enough money,” Boehm said. If students have already started paying back a student loan, then they need to pick up a 1098- E from their place of payment because student loan interest is deductible.
“Don’t worry too much if you make a mistake. The government will let you know if you owe more money; however, they don’t tell you if the government owes you money,” Boehm said.
Students have several options for filing their taxes. Students can get help from their parents, Boehm said, who tend to have lots of experience in this area. “Tax companies are another good option,” he added, “except they do charge.”
Online avenues are also available. Many students can e-file their taxes for free if their income is less than $50,000 a year. The program will walk them through the process, step by step.
Whatever method the filer uses, experts recommend getting them done soon.