IRS Offers Tips for College Students as April 18 Filing Deadline Approaches
LOS ANGELES – The Internal Revenue Service reminds college students that the filing deadline for 2010 tax returns is April 18. For those students who haven’t filed yet, here are some tax tips from the IRS:
1. Should I file a federal tax return if my parents still claim me as a dependent on their tax return? College students should talk to their parents before filing taxes. If they’re helping the student pay for college expenses, they may claim the student as a dependent. If that’s the case, the student may still consider filing because they may qualify for a refund. If students are living without help from their parents they should be able to file independently.
2. What is considered taxable income? The following kinds of income often received by students are generally taxable: Pay for services performed (on-campus work-study programs, outside employment – retail, restaurants, etc), Self-employment income (wages earned from providing tutoring services, research project/paper assistance) Investment income (U.S. Savings Bonds, Dividends), certain scholarships and fellowships.
3. How can the IRS help me offset education costs? College can be very expensive. To help students the IRS offers programs such as The American Opportunity Credit which can help students pay part of the cost of the first four years of college. Eligible taxpayers may qualify for the maximum annual credit of $2,500. Generally, 40 percent of the credit is refundable, which means that you may be able to receive up to $1,000, even if you owe no taxes.
4. Any deductions for Tuition and Fees? Students may be able to deduct qualified education expenses paid during the year. Students cannot claim this deduction if their filing status is married filing separately or if their parents are claiming them as a dependent on their tax return. The tuition and fees deduction is taken as an adjustment to income and can reduce the amount of an individual’s income subject to tax by up to $4,000.
5. Do students have to pay taxes on scholarships, fellowships and grants? Qualified scholarships and fellowships are treated as tax-free amounts if all of the following conditions are met: 1.You are a candidate for a degree at an educational institution. 2. Amounts you receive as a scholarship or fellowship are used under the conditions of the grant for tuition and fees required for enrollment or attendance at the educational institution, or for books, supplies, and equipment required for courses of instruction.
6. Do international students and scholars have a tax responsibility? Generally, resident aliens are taxed in the same manner as U.S. citizens on their worldwide income, and nonresident aliens are taxed according to special rules contained in certain parts of the Internal Revenue Code. For the most part, a nonresident alien is subject to federal income tax only on income which is derived from sources within the United States and/or income that is effectively connected with a U.S. trade or business.
7. What’s the fastest and most cost-efficient way for college students to file their tax return? IRS e-file! It’s safe. It’s easy. It’s time. If a student’s income was $58,000 or less in 2010, they should let Free File brand-name software do the hard work with free tax preparation and free e-filing. It’s available only through www.IRS.gov, where 20 tax software companies make their products available for free.
8. How can I check the status of my refund? If a student filed their tax return and is expecting a refund, there are fast and convenient ways to find out approximately when to expect it. A student can either visit IRS.gov and click on the “Where’s my Refund” tool or download our new app, IRS2GO on their iPhone or Droid phone to check the status of their refund.
9. I want to learn more about the IRS, our Tax System and the technical aspects of filing a return. Where can I do that? On IRS.gov a student can type “Understanding Taxes” on the search box, and they will be directed to a site where high school and college students can learn the how’s & why’s of taxes. Also, college students are encouraged to participate in Link & Learn, a web-based program that provides tax preparation courses. This fun, interactive program teaches the basics for accurate preparation of income tax returns. After completing the program and successfully passing a test, students can obtain volunteer certification to help low income families with their taxes next year. Best of all, students can complete the training at their own pace.
10. Don’t forget you can also learn about taxes and get daily tax tips by following local IRS Spokeswoman, Anabel Marquez on Twitter @Anabel_IRS; There is also an IRS Youtube page with dozens of informational videos. You can also ask to be added to our Facebook page. Most importantly, our website www.irs.gov has all the tax information any student may need!