Even Students Need to Pay Income Taxes
The ever-helpful Internal Revenue Service has created a page of tax information specifically for college students. It is a really good idea to spend some time there, because it answers just about all the questions that any student could have about filing a tax return. If you are a student with three children, for example, how many dependents can you claim? If you are working and paying for your own college costs, should your parents still claim you as a dependent? When you visit the website, be sure to click on the Assessments page, which should really be called “Fun-Filled Tax Quizzes for Students.” If you visit, you will find out information like this about your taxes . . .
- There’s no such thing as a free lunch. If you are receiving a scholarship, you might have to pay income tax on part of it, if you are using some of it to pay for housing, food, or transportation.
- Taking cash under the table can get you in hot water. If you are receiving tips from waiting tables or parking cars, be sure to report them as taxable income.
- Junior can save you $$$. Even though you are a student who is not earning much, you are probably still entitled to have dependents when you file your return.
- There really are some benefits to being a student. You are probably entitled to claim both the American Opportunity Credit and the Lifetime Learning Credit.
Man, this tax stuff is complicated. But check out the site, because the information it offers really does clear up a lot of questions. And another thing. If you are attending a college now, ask its administration whether the college’s counseling office can fill out your tax return for you. Some colleges offer this service to their students and if it is happening at your school, you’d be wise to take advantage of it. Related Posts New College Course Profile: Personal Finance