The College Student's Guide to Filing Taxes: Part Two

While taxes can be complex and overwhelming, many resources are available to help you figure out everything you need to file your tax return correctly.

By Mari Whitmore — March 21, 2023

Tags: filing taxes, first time tax filing, tax return, tax season, the more you know, ultimate guidebook

The College Student's Guide to Filing Taxes: Part Two

Once you have prepared all the documents and paperwork necessary to file your taxes, you'll have to decide how to file them and then make your way through the filing process. Don't be intimidated by all the forms and technical language. There are many resources available to assist you through the process. Also, check out your school's resources to see if they have any materials to make your tax season easier!

Choose a Filing Method

In the past, the only way to file taxes was on paper. While you can still fill out paper tax documents and mail them to the IRS, many online options are available that simplify filing your taxes. The IRS even recommends filing online, as it is generally faster, more accurate, and more secure than filing on paper and sending your tax return through the mail. Many online tax preparation services are available, including Free File, a free service provided by the IRS for taxpayers with an income of $72,000 or less.

Also, there are many free "DIY" tax services, which allow you to input your financial information and either pay taxes or claim your refund online. Suppose you are stumped by any aspect of the tax filing process or have a more complicated tax situation. In that case, hiring a tax professional or a paid tax service may be beneficial to help you prepare your tax return. Your school may also have resources that you can take advantage of. Look into the various options to determine the best one for you.

Filling Out All the Forms

You're sitting at your laptop with financial information and tax documents on your desk and some intimidating forms on the screen before you. Take a deep breath and focus. You can do it! Start by filling out all the required information from your income documents. You'll add the relevant numbers and information from your W-2 or other income forms to the corresponding sections on your tax return form.

This isn't necessarily complicated. Online services usually walk you through every step of the process and provide detailed instructions for each page or form. Depending on which online filing service you use, you may use a camera on your device to capture the information from your documents or to autofill information from a previous tax year. However, double-check everything you enter to ensure that it is accurate. These features streamline the process and dramatically reduce your time on your taxes. Once you have all of your income information filled out, you can move on to the deductions and credits section.

Deductions

Filling out your 1040 will determine your taxable income. Your taxable income is your total income minus any deductions and exemptions. In other words, deductions make your taxable income less, thus decreasing the amount of taxes you may have to pay. If you earn income from a job, you may be able to deduct certain expenses from your taxable income. If you received financial aid or scholarships, you could exclude them from your taxable income if they were used for qualified educational expenses, such as tuition. However, financial aid used for study-abroad programs may be subject to taxes.

Credits

As a college student, you may be eligible for certain education-related tax credits, such as the American Opportunity Tax Credit (AOTC) or the Lifetime Learning Credit (LLC). A credit directly reduces the amount of taxes you owe rather than reducing the amount of your income subject to taxes. The AOTC allows you to claim up to $2,500 per year for four years of college, while the LLC allows you to claim up to $2,000 per year for any level of post-secondary education. Keep in mind that if you are claimed as a dependent, you will not qualify for these benefits.

If you have student loans, you can deduct some of the interest paid on your loans. The IRS offers a comprehensive information center that can help determine what aspects of your student finances impact your taxes. Read more about it at Tax Benefits for Education: Information Center | Internal Revenue Service to determine exactly what benefits you're qualified for. If you're filing online, the system you use will likely have information to help you determine exactly what types of financial aid can be excluded, but be sure to double-check with the IRS website if you're unsure.

Investments

If you have invested money in the stock market or another form, you should receive tax forms from whatever brokerage or investment service that you use. These forms may also need to be submitted with your taxes, so don't forget about them! Be sure to double-check the requirements for the particular types of investments you have, as the tax requirements vary. You don't want to submit incorrect information accidentally.

State Taxes

If you live in one of the many states with a state income tax, you'll have to fill out a state income tax return and a federal one. If you're filing online, this will probably be included with the federal return and the information you input for the federal return will be automatically transferred to your state income tax return form. As a student, be aware that you may need to file state income taxes in multiple states, depending on where you lived and worked throughout the year and where you are officially considered a resident.

The requirements vary widely depending on what states you earned income in and the time you spent in different states, particularly as a student. It's best to check the requirements on your state's tax website and the tax websites of any states you worked or lived in during the year to determine exactly what you need to do to file correctly. Some DIY online tax filing services are free for federal tax returns, but charge a fee for state income tax returns, so check if such a fee applies to you.

File Your Tax Return

Once you have completed your tax return, you can file it! If you filled out the information online, this is probably as simple as e-signing and clicking a button. Keep a copy of your tax return for your records after filing. This will come in handy in case the IRS has any questions about your return in the future, and for filing your taxes next year. If you owe any taxes, you can pay online by simply inputting your payment information or over the phone. If you are expecting a refund, filing your tax return as soon as possible will help you receive your refund sooner. Most refunds are delivered via direct deposit, so after you file your tax return and input any necessary information, there's nothing you need to do except wait for the cash to hit your account. And that's it; you've filed your taxes!

While taxes can be complex and overwhelming, many resources are available to help you figure out everything you need to file your tax return correctly. Take advantage of the information available so you can make the most of your income and financial situation as a student and feel confident in filing your taxes in the future.

Mari Whitmore

Mari Whitmore recently graduated from a tiny private college in the middle of beautiful Wyoming. She spends her time traveling, adventuring in nature, writing, and working as a barista and bartender. Recently, Mari relocated to the gorgeous hill country of Central Texas. In her free time, she loves to hike, paddleboard, read, paint, watch movies, and gather with friends and family.

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