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Learn everything you need to know about filing taxes for students in this post!
It’s never too early to learn how to file your taxes!
As a college student on your own for the first time, filing taxes can seem daunting and scary.
As a newcomer to the adulting world, it definitely is.
With tax filing being a complicated system, it’s important to learn the right way early on. You can avoid BIG problems down the road just by getting all your questions answered before it comes time to do your own taxes.
Unfortunately, when it comes to taxes you can’t rely on your parents forever. Oh, how I wish I could rely on someone else to handle my taxes!
In the end, it’s ultimately my responsibility.
Filing Taxes for Students
Today’s post has everything you’re going to want to know about filing taxes for students.
I’m answering all your questions to make it as easy as possible for you, BECAUSE…
Taxes are confusing and tricky!
It’s like the government wants us to mess up so they can get more money in penalties. And I think we’d all prefer to avoid that…
My goal is to help you keep, or get back, as much money as possible (legally).
I’ll explore everything there is know about – from which form to use to how you can file for free online.
11 Tax Tips for College Students
Table of Contents:
- Do college students have to file taxes?
- Do full-time students pay tax?
- What if you’re – filing taxes as a student with no income?
- Can a student file taxes if their parents claim them?
- College Student Filing Taxes – Dependent Status
- College Student Filing Taxes – Independent Status
- What can you claim on your taxes for a college student? (Tax breaks for students)
- Tax Forms for College Students
- What is a 1098 T form used for?
- Where to File Taxes
- When to file taxes
Disclaimer: This is general advice and for informational purposes. This is based on what I’ve learned from preparing my own taxes for 30+ years. For more help, consider consulting a professional.
How to File Taxes for the First Time
Let’s begin with the most basic questions first…
Do college students have to file taxes?
Are students exempt from taxes?
This is a common question when it comes to filing taxes for students and an understandable thing to ask when filing taxes for the first time.
QUICK ANSWER: If you paid anything into federal taxes this year from income, then YES – you need to file!
Unfortunately, being a full-time student does NOT exempt you from federal income tax.
Also note that:
Even if you made less than the limits required to file, you can get everything you paid in refunded back to you.
You do not get social security or Medicare tax withholdings back EVER.
Do full-time students pay tax?
QUICK ANSWER: Being a full-time student, being a dependent, living with your parents or using FAFSA does NOT exempt you from filing taxes.
In the eyes of the IRS, you will be treated like any other tax paying adult in this country.
If you make less than $6,300 (even if you get a W2) you do not have to file taxes.
That is – unless you want to get back your withholdings that were taken out (see above where I just talked about that).
Which you should, of course, want that money back!
Here are the IRS requirements to file:
- If you receive a 1099Misc of any kind
- Total income (wages, salaries, taxable scholarships, etc) is more than $6,300
- You have unearned income (interest, dividends, capital gains) of more than $1,050
- You have unearned income over $350 and gross income more than $1,050
- You have household employee income (babysitting, lawn mowing, chores) over $1,900
- You have self-employment income over $400
So in essence:
Almost everyone needs to (or should) file taxes. It’s either required by law or to simply get back the money you paid to the government.
But let’s say, you worked and didn’t make over $6,300 this year.
Unless you filed EXEMPT on a w-4 form you provided to your employer, you paid taxes to the federal government.
If you’re still not sure:
Pull out your last pay stub for the year. Look at the amounts taken out.
You could potentially get 100% of that refunded!
What if you’re – filing taxes as a student with no income?
When filing taxes for students, note that:
If you didn’t work, that doesn’t necessarily mean that you didn’t have any income for the year.
All of these are considered taxable sources of income:
- Scholarships can be partially taxable as detailed here
- Interest on bank accounts, dividends on stocks & capital gains are taxable
- Self-employment income (like freelancing on the side)
- Other income such as babysitting, lawn mowing, and house sitting can be taxable
Concerning the last bullet point:
These sources of income are called miscellaneous income. With reported Misc. income you should receive a tax statement from the individual you worked for.
Most people aren’t going to report giving you income for small, side jobs. Usually, it’s the full-time gigs that report.
Can a student file taxes if their parents claim them?
QUICK ANSWER: YES! This just means you are a dependent on someone else’s taxes. It also means you have fewer deductions on your own taxes.
College Student Filing Taxes – Dependent Status
Well, most of the time…
If you are still living at home, your parents will want to claim you on their taxes. This means they are paying over 50% of your living expenses, and therefore you are still considered a dependent.
Unless you work something else out with them, they can claim you (if you are a full-time student) for as long as you’re under age 24.
It’s important to note:
If your parents claim you, then all grants, tuition payments, and scholarships will fall under their taxes. That means that they will be able to claim any of the educational tax credits you qualify for, as well.
When you file your taxes:
You will simply select the option that says “I can be claimed on someone else’s return.”
But if your income totals less than $6,300 for the year, then there’s no need to worry about the taxable portion of a scholarship.
- Also Read: Tons of current scholarship opportunities!
College Student Filing Taxes – Independent Status
Claiming yourself on your taxes, or filing as independent:
This is usually done once you are living on your own and paying more than 50% of own expenses.
If you claim yourself (depending on your income status) you’ll typically get a bigger tax refund.
What can you claim on your taxes for a college student?
Filing taxes for students and wondering what education specific deductions you can take?
Thankfully some college expenses are tax deductible!
It’s nice to know that you’re getting something for working your ass off! I mean, besides the degree.
Tax Breaks for Students
Do you get a tax credit for being a student?
QUICK ANSWER: YES!
As you’re learning the right way for filing taxes for students, here are some tax credits to be aware of…
1. American Opportunity Credit
With the American Opportunity Credit, you (or your parents – see dependent info above) can claim up to $2,500 in tax credits for up to four years.
It’s calculated as 100% of your first $2,000 in college costs and then 25% of the next $2,000.
To qualify for this credit, you must be enrolled at least half-time at an accredited post-secondary educational institution.
Expenses included are tuition, fees, textbooks or any other required supplies. Find more info about this tax credit for students here.
This credit is awesome because if the amount of the credit for which you’re eligible exceeds your tax liability, the excess is refunded to you – up to $1,000!
You can get it even if you owe no tax!
2. Lifetime Learning Credit
With the Lifetime Learning Credit, you can claim 20% of the first $10,000 you paid in tuition expenses per year. Or, up to a $2,000 tax credit per year.
Unlike the American Opportunity Credit, this credit does not have a limit on how many years you can claim it.
You do not need to be enrolled in a program seeking a degree to claim this. You can be a graduate student in only one class and still qualify.
Qualified expenses include:
- Any required fees
Expenses do not include books, supplies, room & board, or anything else.
This credit cannot be paid to you in a refund, it can only reduce how much you pay in taxes with this.
3. Tuition and Fees Deduction
With this tax credit, college students can deduct up to $4,000 in qualified college costs.
These are expenses you paid for out of your own pocket, not anything that was paid for with grants, tax-free scholarships, etc.
Tuition, fees & expenses that you are required to pay to a qualified educational institution as part of your enrollment.
This deduction will reduce the taxable income that you have.
Which means that:
You get to subtract $4,000 from your total taxable income.
**NOTE**: You cannot claim the American Opportunity Credit, the Lifetime Learning Credit and the Tuition and Fees deduction for the same student in the same year. You must choose only one.
So of course, choose the one that gives you the biggest tax break!
Not sure which one would benefit you most? Check out this comparison of all three.
Plus, you can also get this tax deduction…
You (or your parents) can deduct up to $2,500 in interest that you paid during the tax year on qualifying student loans!
Filing taxes for students tip: always claim as many deductions as you can to maximize your return!
Tax Forms for College Students
What forms for taxes you need will be based on your income situation.
QUICK ANSWER: Most students will use a form called 1040.
Starting in 2018 – forms 1040A and 104EZ are no longer available to file taxes.
But, they have added most of what you need into form 1040.
The form 1040 has new “schedules” you need in them to complete more complex tax forms (schedules are like extra forms that help you do necessary calculations in your taxes).
Basically, it should have everything you need as a college student.
When you’re ready to file your taxes you’ll need to gather the needed documents. Like all of your income statements, including:
- W-2 forms
- 1099MISC forms
- 1098 T forms
- Any other forms with reported income
These income forms are supposed to be postmarked to you no later than January 31st.
1 – Figure out what your dependency status is (we talked about this above!).
2 – Find out if you can claim an education credit (this tool can help you determine if you’re eligible for one).
What is a 1098 T form used for?
That’s a great question!
It’s actually super important form to be aware of when you’re in college.
If you go to an accredited post-secondary institution and have paid any “qualified education expenses” then the school is required to send you a form 1098 T.
QUICK ANSWER: The 1098 T form is also known as a Tuition Statement; it provides information about educational expenses that may qualify for education-related tax credits.
In a nutshell:
DO NOT lose your 1098 T form! It’s like throwing away money if you do.
Where to File Taxes
Now that you have all of the information, it’s so easy now!
There are a lot of options when it comes to filing taxes as a student, and some are even free.
QUICK ANSWER: You can file them online (preferably for free using a service like Credit Karma Tax), with a tax preparation program, or by going to professional (think H&RBlock or an accountant).
How to do taxes yourself – free student tax filing!
Online Tax Filing
Let’s start with our first option, preparing your taxes for free online.
You could go to the source…
The IRS has free tax filing options online, but their online system isn’t the easiest to understand.
Or, you can go to a myriad of other places that are more user-friendly.
Places to prepare your taxes for free online where you’re filing taxes for students:
You should know that if you use a free tax service, they will try to upsell you.
You don’t need to buy anything extra, such as forms or filing protection. You can simply skip all extra offers and do it all for free.
They will also try to sell filing your state tax returns for a fee. Don’t pay for that!
Almost every state allows you to file your state tax forms for free online at their respective state websites.
Always do a Google search to see if your state offers FREE e-filing.
Online tax preparation companies may e-file your federal forms for free, but some may not.
While e-filing your taxes for a fee may just seem easier, it’s completely unnecessary!
If there is a charge to e-file, simply print out your forms and mail them in.
Your tax return will take a little longer to process, but it’ll only cost you a stamp or two.
Other Tax Filing Options
Other tax filing options include…
Buying a Tax Program
Sure, you can buy them by downloading or going to the store, but unless you are at a point where your taxes are more complicated than a 40-year-old homeowner, you don’t need to do this.
These cost $35 and up!
Free online sites will do just fine for your average tax situation.
Going to a Professional
Or, you could go to an accountant or service like H&RBlock.
This is by far the most expensive way to file your taxes – whether you’re filing taxes for students or otherwise! In fact, the cost will probably eat up most of your return.
In my opinion – it’s not worth it!
When to file taxes
When it comes to filing taxes for students, this part is simple to remember!
QUICK ANSWER: Every year, you have until April 15th to file your taxes for the previous year.
If it falls on a weekend, then it’s the next business day after April 15th.
I wouldn’t wait until the last minute. It’s much easier to get it done early.
The sooner you file, the sooner you can get back any refund you may be owed!
That sums up all the tips I have today when it comes to filing taxes for students.
If you’ve never had to file your own taxes before, don’t worry!
It’s a lot more simple than it seems once you’ve gone through the process.
Just take your time! Don’t be afraid to ask family, friends or even Google for additional help.
Do you have any other questions about filing taxes for students?
Leave a comment, and I’ll answer you ASAP!