It’s that time of year again! It’s time to file your taxes. For students, taxes are generally more straightforward than when you get older, make more money, and start accumulating assets.
Still, filing for the first time can be intimidating. Between knowing what forms you need to understanding your education credits, there’s a lot to take in.
Here are some easy ways to prepare for filing your taxes, so you get it right the first time.
Gather all your documents
The first step to getting your taxes done is having all your documents on hand. Thankfully, most students have just a few simple documents to keep track of. Not all of them will apply to your situation, but be sure to understand what each one is for so you know if you need it.
- W-2 Form: You’ll need this if you’ve been employed in a role where taxes have been withheld from your paycheck. Your employer should send this to you if you don’t get it before January 31st, contact them directly.
- Form 1098-T: This is the tuition statement that will be provided to you by your school. If you’ve paid tuition at all, even via financial aid, you’ll need this ahead of filing your taxes.
- Form 1098-E: If you’re paying on your student loans already, you’ll need this form from the lender that currently holds your loan.
- Form 8863: You might need this if you’ve qualified for any education credits. If you file your taxes through a service like HR Block or TurboTax, they will likely tell you if you need to fill it out.
Use A Tax Filing Service
It might seem simple to file your taxes if you’ve never done it, but they’re always more complicated than you expect. Unless you consider yourself something of a tax expert, using a service might be easier for you.
Here are some of the more affordable tax services out there:
- Turbo Tax – Can be done by yourself online
- H&R Block – Can be done in person with a tax professional
- The IRS Tax Website – Can be done by yourself online
- eSmart Tax – Can be done by yourself online
If you decide to file through one of these programs, you’ll still need to have all your documents at the ready.
They will usually walk you through the process and help guide you where to fill what in. It’s much easier than trying to decipher all the numbers and boxes on your own.
Things You Should Know
Even if you decide to use one of the services above, there are still some things you’re going to need to know. To get prepared to file, keep reading, so you know what information you need to be aware of.
The last thing you want to do is be stuck amending your taxes later because you made a mistake.
Are you considered a dependent?
There’s a simple way to understand if you’re considered a dependent by the IRS. Firstly, if you need your parent’s information on the FAFSA®, that means you are dependent.
But if you still feel like you need some clarification — if your parents are claiming you as a dependent on their taxes for the year you’re filing for, you are not eligible to claim credits or deductions for yourself. You are considered their dependent.
The IRS says that your parents can typically claim you as a dependent until you’re 19 unless you’re a student, in which case they can keep claiming you until you’re 24. The best way to know if you can claim deductions or credits is to ask your parents if they’re claiming you and what credits and deductions they’re taking.
It’s important to note that if your parents claim an education expense on your behalf, you are not able to claim it for yourself.
You may be able to claim education credits
There are several credits and deductions that students could be eligible for. Here are a few to be aware of:
- The American Opportunity Tax Credit
- Lifetime Learning Credit
- Deducting Higher Education Expenses
- Deducting Student Loan Interest
Scholarships and Taxes
Scholarships are usually tax-free money that you use towards your education. However, you may have to claim a portion of them on your taxes if you’ve used them for anything other than paying your tuition.
If you’ve used scholarship money to pay for rent, utilities, supplies, or anything beyond your tuition, you have to claim that amount on your taxes.
For more information, you can check out the IRS website or talk to a tax professional.
Don’t forget to officially file
If you choose to file your taxes online, you can do so electronically, usually for a small fee. If not, you have to mail your tax forms. It’s important not to forget to send them in, or your taxes will not officially be filed.
Once you send them off, you’re officially done for the year. Hopefully, you get a little money back, and if not, you can always adjust how much gets deducted from your paycheck moving forward. If you want to make that change, talk to the HR department or manager at your place of employment.
Don’t forget that if you have any questions, using a service like H&R Block or TurboTax can be a huge help. If not, consider contacting a professional. Taxes are one of those life responsibilities you want to make sure you get right the first time.