College is, in many ways, the best years of your life but for first-time taxpayers, college years can be very frustrating and confusing. Many college students are stuck in a weird transitional phase—legally you’re an adult but you may still depend on your parents for college expenses. Other students are struggling to pay their way through school, maintaining multiple jobs and taking on student loans. Some students are married; others are single. There is no clear model for how a college student should file his/her taxes but here are some things to consider as the April 15th deadline approaches.
- Financial (in)dependence. It’s important to remember that you can only file your taxes as an “independent” if your parents or guardians are not currently claiming you as a “dependent” on their taxes. Have a frank conversation with your parents about filing your taxes and examine the different scenarios.
- Tax free? Some universities offer free or low-cost tax filing services to students. If you find yourself confused about filing your taxes, seek out help.
- Do your homework. If you are paying your way through school, you may be eligible for education tax credits or rebates. Make sure you have used all of your available resources.
Taxes can be frustrating and confusing, but if you take the proper steps the process should be relatively painless. Learn more about taxes in this recent column from Practical Money Matters.by JohnH