Tax season frustrating for students

March 24, 2004
By Jenna Stevens
Staff Writer

If your in college, doing your taxes feels like one more final exam.  But there’s one big difference.  This grade is measured in cash.

There are several steps that students can take to make filing their taxes a little less stressful and with the right preparations students can even save themselves some extra money.

The most important step for students to take is simply to file.  Even if you do not make enough money to file, if you have had money taken out of your paychecks over the course of the year, you are entitled to a refund.  Another important thing to remember is to start early. If you do not have your W2 forms you can use the information from your last pay stub and then simply download the federal and state forms from the Internet. But, students are warned to be sure to fill out the forms on paper first to allow enough time to double-check the numbers.

Another important thing for students to understand is that they can take extra credit. What this means is that they can receive help from the government in the form of deductions or credits known as the Hope Scholarship Credit, the Lifetime Learning Credit, or the Higher Educations Expenses Deduction.

Only one of these options may be selected, so read them carefully and select the one most pertinent to your families’ financial situation. It is also important to fully understand the family’s financial situation to know if it is necessary for you to file or if you will be claimed as a dependant on your parent’s forms.

Understanding where money is coming from is also necessary to file a successful tax return. Money received from a 529 account or a Coverdell education saving account cannot count as expenses towards a total debt because the government has already given you a tax break on those funds. Students can however, deduct up to $2,500 in interest for unsubsidized loans.

The most important point is to be sure you watch your income throughout the year.

“It is smart to leverage your funds so that you can qualify for every tax advantage," a tax representative said.  "But you don’t want to outfox yourself and loose tuition money either.”  So, before engaging in what is defiantly the most valuable exam of the semester, make sure to do your homework.

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