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Help Your Students Prepare for Tax Season

January 17, 2019

If your students are like many of the rest of us, the thought of filing income taxes can be daunting. What are the most important tax tips to share with your students? A few basics can help them understand what income counts, whether they need to—or should—file, what forms to use, and how to go about filing with a minimum of stress.

Do your students need to file a tax return?

Whether your students need to file a tax return generally depends on their gross income, filing status, and age. If they’re single, under 65,  and claiming themselves as an exemption for the 2018 tax filing year, they must file if their gross income was at least $12,000. Students must also file a tax return if they had net earnings from self-employment of at least $400. If the student can be claimed as a dependent on someone else’s tax return, and are single, under 65, and not blind, they must file if they meet one of the following criteria.

  • Their unearned income was over $1,050.
  • Their earned income was over $12,000.
  • Their gross income was more than the larger of $1,050 or their earned income (up to $11,650) + $350.

What counts as income?

Gross income is generally defined as all income you receive in the form of money, goods, property, and services that isn’t exempt from tax. Some examples include the following:

  • Income reported by employers on W2 forms
  • Income from work-study programs
  • Business income earned through freelance or entrepreneurial work (e.g., selling t-shirts, designing a website for a fee, etc.)
  • Some education grants, especially those used for purposes other than tuition, such as room and board
  • Any interest from financial institutions

What forms should students use when filing their taxes?

W2: A W2 is the United States federal tax form issued by employers that states how much an employee was paid and the amount of taxes withheld from their paychecks in the previous year. The amount of taxes withheld is based on the withholding status determined by the W-4 form that’s filled out when an employee begins a new job. An employee’s withholding status takes into account their marital status, dependents, and whether or not the employee wishes to have more than the standard amount withheld from each paycheck.

1040: For the 2018 tax year, the IRS has redesigned the 1040 form and eliminated the 1040A and 1040 EZ. All individuals will use the 1040 to file their annual income tax returns. The 1040 may need to be supplemented with new numbered schedules to properly report income for 2018.

1098-E: The 1098-E is a form filed with the IRS that details the amount of interest paid on qualified student loans during the previous year. Students may be able to deduct all or part of the interest paid on qualified student loans, which could reduce the amount they pay in income tax.

How should students file their tax return?

Students have a variety of options available to them when filing their tax return.

In Person: In addition to local accounting firms, there are numerous tax preparation companies that advertise during tax season. For a small fee, students have the opportunity to work with a tax professional who will complete their income tax returns and walk through the process with them. This can be useful for first-time filers, or students with complicated financial situations.

Online: The IRS offers free online tax filing. Many tax preparation companies also offer their services online, and in some cases, it may be offered free of charge. This option is great for students who want to file their own taxes quickly and cheaply.

VITA: For students who want to tackle their income tax returns on their own, there are still some safety nets available to them. Many schools work with Volunteer Income Tax Assistance (VITA), a national organization that offers free tax assistance for simple tax questions and has many branches available on college campuses. If your students have questions about their tax returns, find out if VITA is available near you.

More Information

For additional information, refer to irs.gov.

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