Ahhh, April in Charlottesville. The Dave Matthews Band will be playing. The Foxfield horses will be running. The fourth-years will be slacking. The tax-paying students will be filling out IRS forms.
What was that last one?
April 15 is tax day. Now the day when our parents stood in line grumbling at the post office is applicable to us. If you still are living in idyllic ignorance about how to do your taxes, or didn't even know your parents have been doing your taxes for you, the time has come to take at least a minimal interest in your personal finances.
Most students agree they would rather watch the mildew accumulate in their showers than learn how to do their taxes. Upon encountering income taxe filing for the first time, students generally find the task both stressful and laborious.
The filing process, however, isn't as difficult as it seems. In fact, there are several computer programs designed to take you step by step through tax completion. Before beginning, determine whether you need to file in the first place.
Do I need to pay taxes?
Most students do not fully support themselves. Parents usually pay for the entire cost of college tuition, rent, food and clothes. If this is the case, your parents will probably claim you as a dependent when filing their income taxes. Being a dependent simply means that you are financially dependent upon someone else. To claim you as a dependent, your parents must provide you with at least 50 percent of your financial needs.
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If your parents claim you as a dependent, you must file a return if your earned income is greater than $4,400 or your unearned income in the form of taxable interest, dividends and capital gains exceeded $700.
On the other hand, if you are single, not being claimed as a dependent and your gross income exceeded $7,200 you must file.
The tax code wording might be confusing but the message rings clear: if you have earned enough money this year to afford even a Happy Meal, the IRS is eager to claim its piece of the pie.
Where do I obtain tax forms?
Internal Revenue Service forms can be obtained in several different ways. On the IRS Web site www.IRS.gov clicking on download forms, instructions, and publications will direct you to everything that you need. You can also fax or phone the IRS or send them an order for forms and instructions via mail.
Tax forms can also be obtained at local post offices, at banks or at Alderman library. If you search for income tax forms on the Internet, you will find several sites that offer free downloading of all of the necessary forms.
Which form should I use?
Most college students filing income taxes will use the 1040EZ form. To make sure that this is the right form for you, you must meet eight requirements. Of the eight, there are a few narrowly defined, important guidelines that deserve close attention.
Basically, if you didn't claim any dependents, didn't make $50,000 and didn't earn $400 in interest over the course of the year, you probably qualify for the 1040ez. There also are more obvious requirements, such as being under 65 years old, which college students usually meet.
Once you have the correct form, you are ready to file. Although the process looks intimidating at first the IRS outlines instructions for everything, says Economics Prof. Leona Friedman.
How do I fill out the forms?
Once you have all your income numbers compiled, it is easy to use tax preparation programs such as Kiplinger's Taxcut, and Quicken's TurboTax to allow you to file the 1040EZ online free of charge.
The hardest part after determining whether you need to file for taxes is putting your tax information together. This process, however, is not as difficult as it appears.
As soon as you started working and earning an income, you should have filed a W-4 form with your employer to begin keeping track of your earnings. At the end of the year, your employer will send you a W-2 form, which includes your income information. Once these numbers are collected, the 1040EZ form will take you methodically through the necessary calculations in order to complete your tax return.
Seeking professional accounting help also is a possibility, but college students' taxes are not usually complicated enough to merit the costly service fees.
What if I miss the submission deadline?
If you need to file and haven't done so, you still have ample time between now and April 15. However, if you find yourself in a bind, you can get an automatic four-month extension by filing form 4868 or by filing for an extension via phone or fax. It is more than likely that most students earned little income and will receive a tax refund or money back from the government when all is said and done. Therefore, for most students it is advantageous to file income taxes. If a student is owed money from the government and neglects to file, she or he won't receive the refund.
Where can I find more information about taxes?
The most comprehensive Web site by far is www.IRS.gov. Other good websites include www.quicken.com and www.hrblock.com. All three sites walk tax payers through the filing process in simple language and offer a variety of helpful sidebars such as tax refund calculators and e-filing assistance. They also provide a host of answers to commonly asked questions.
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