And so it has begun; tax season is underway. With a deadline of April 15, some taxpayers have started the looming process of figuring out how much they owe Uncle Sam or how much he owes them.
Students should start preparing to file taxes soon because deadlines for financial aid and scholarships are approaching.
Students have a couple choices when it comes to filing taxes; tax software such as TurboTax, tax filing agencies such as H&R Block, filing with tax accountants or simply the do-it-yourself approach.
What paperwork do students need to start the process?
Marty Akers, a district manager for H&R Block, and Terri Krueger, an H&R Block office manger, offered a grocery list for student to have ready.
Students should have received W-2’s from any employers they worked for in the past year. Along with any W-2’s, students also need bank statements and, for students who have student loans, a 1099-T statement.
“As a student, they need to gather any interest (paperwork) they gather on loans and 1099-T forms that may qualify them for education credit benefits,” Krueger said.
Krueger and Akers said students should keep handy last year’s tax return as well as any other documents from any other source of income such as trust accounts.
Students should also call home before filling out boxes on tax forms.
“When my mom and dad tell me to (file taxes) is when I file mine,” said freshman business major Ashley Schirmer
Students might claim themselves, not knowing whether their parents have already claimed them on their taxes.
“If a student claims themselves and then a parent claims them, they will receive a letter from the IRS,” Krueger said. “Either the student or the parents will have to amend the returns.”
If that happens and either the student or the parents received a refund, that refund might turn into a debt.
“It’s always good (for students) to check with mom and dad before doing their taxes,” Akers said.
How long can students expect refunds?
Students have the option of walking in with their W-2 and walking out with a refund because H&R Block offers an instant refund anticipation loan. The loan goes through a bank and if approved, students can have their refund that day.
Another popular way to file taxes is electronic filing. The process is quicker than filing by mail. Students who use this approach should expect their refunds in less than two weeks.
But the faster someone wants their refund, the more it will cost them. The instant refund loan charges a loan and transaction fee. Filing electronically costs nothing.
Depending on how much they know about what they are filing and what credit deductions they are eligible for, students might not want to file their taxes themselves.
“The biggest advantage (of getting help filing taxes) is we have a lot of tax education, we do a lot of amended returns, students don’t often know about education benefits, they don’t know the difference about claiming themselves or their parents claiming them,” Akers said. “You better know what you are doing or you are going to cheat yourself out of money.”
If students feel they can handle filing their own taxes, they can file free on the Internet. However, this is only if they made less than $28,000. Other restrictions apply with Internet filing. Restrictions can be found at http://www.irs.gov/app/freeFile/welcome.jsp.
“For me, there’s no rush, you can do it online, it’s pretty easy,” said Teal Mefford, a technical journalism freshman. “That’s how I did it last year.”
At H&R Block, rates start at $68 for a basic tax filing that includes both state and federal taxes.
Turbotax, a leading tax software, sells for about $60.
The deadline for taxpayers who owe money is April 15, but those who are owed a return have up to three years to claim that refund.
A month before that is the priority deadline to file for the Free Application for Federal Student Aid. The priority and recommended deadline for students to file for federal aid is March 1, said Christie Leighton, the assistant director for Student Financial Services.
Leighton advises student to file their taxes, “ASAP, because the sooner you get it in, the sooner it will be processed and the sooner you know how much to expect and prepare for the next school year.”
As soon as students file their taxes, they can log on to www.FAFSA.ed.gov to file for financial aid online.
March 1 is also the deadline for students to apply for the CSU Scholarship Application.
“Sometimes, students don’t think they qualify so they don’t apply, but all students are eligible for something,” Leighton said. “If you think you can benefit from finical aid (or scholarships), apply for it.”
Students who need more information about financial aid, FAFSA or CSUSA, can contact Student Financial Services at 491-6321.
Grocery list to prepare taxes:
* W-2 from employers
* Bank statements
* 1099-T statements/student loans
* Last year’s tax returns
* Any other financial statements (i.e. trust statements)
On the web: