There are many things college students and their parents should keep in mind before filing their taxes. Tax experts say it’s great for college students to start filing their own returns, but parents and students should double-check everything carefully before anyone hits “submit.” ” button.
Clarify who is a dependent
When dependent students file their taxes for the first time, it’s easy to overlook checking the “Dependent” checkbox. In that case, you won’t be able to claim the dependent on your parents’ tax forms without going through the long and arduous process of amending your return just because you didn’t check the box. .
“College students need to understand whether their parents are eligible to claim them as a dependent,” says Tom Oseven, director of tax content and government relations at the American Association of Tax Professionals. Just because a taxpayer doesn’t claim dependents doesn’t mean the taxpayer is independent, he says.
IRS says 940,000 people have not claimed more than $1 billion in expiring 2020 tax refunds
Claim all eligible college and other education tax credits
There are two types of education tax credits. The American Opportunity Credit is up to $2,500 per year (based on at least his $4,000 spent on tuition, books, and fees) for the first four years of his bachelor’s degree.
The second lifelong learning credit can be used toward an undergraduate, graduate, or professional degree and is up to $2,000 (based on 20% of qualified education expenses). Parents cannot claim both for the same dependent child (or student). However, if you have multiple dependents on that return, you can use either credit for each student (but not both at the same time).
Students walk across the campus of Dartmouth College on March 5, 2024 in Hanover, New Hampshire. If you are a college student or a parent submitting a tax form, you should double-check that all information is correct before submitting. (AP Photo/Robert F. Bucati, File)
Double check that you have all forms in hand
While most tax-related documents are reliably mailed, college students tend to work multiple jobs each year, and some college tax documents must be printed from the university portal and may not be mailed at all. Therefore, before filing, make sure your dependent students make sure all tax forms are filed for all jobs and check with the university for additional tax forms. .
Clarify state residency rights
If a student is paying at least half of their own costs and plans to charge in-state tuition at a college located in a different state than the one in which their parents live, the college’s You may want to check with your financial aid office. Mr Oseven said:
In some cases, claiming a child as a dependent may not be the best option given the overall economic situation.
CLICK HERE TO GET THE FOX NEWS APP
“Providing an address in the state where your child’s college is located may not be enough to charge in-state tuition,” Oseven says.
Please have university students submit files if necessary
College students may need to file their own returns, even if their parents filed them. Kathy Pickering, chief tax officer at H&R Block, said students and parents should review the dependent filing rules and determine whether students need to file their own tax return based on their gross income. It states that there is.
Get the most out of your 529 account
Qualified distributions from 529 accounts are tax-free and are not included in the child’s income, Pickering said. Also, while only eligible tuition, fees, and books are included in the tax credit calculation, 529 accounts also include room and board as part of the withdrawal.
