Students who are juggling a myriad of college expenses, like working a part-time job or saving up for next semester’s tuition and fees, are beginning to find themselves in the midst of tax season.
Feb. 12 marked the beginning of tax season, a time in which the United States’ Internal Revenue Service begins accepting individual income tax returns. People can begin filing their taxes as soon as they receive all necessary documentation required by the IRS. The deadline to pay any taxes owed is April 15.
For college students filing their own taxes, it can be hard to know where to start. The Red & Black has compiled information to help students understand the complexities behind the tax return process.
Understanding a tax return
Before beginning the filing process, it is important to understand what a tax return is. In its simplest form, a tax return is a report sent to the U.S. government outlining how much money you’ve earned, and how much in taxes you’ve paid in one year, according to Merriam-Webster.
In addition to your income, your tax return outlines your expenses and investments, according to an article in U.S. News.
When filing your tax return, the government determines whether you owe them money, or whether they owe you money, also known as a tax return refund. An individual qualifies for a tax return refund when they pay more to their state or federal government throughout the year than they are actually responsible for paying, also known as a tax liability, a U.S. News article said.
For most people, it is required by law to file a tax return. Although, depending on much money you’ve earned in a year, college students may not be required to file a tax return, according to USAGov, an informational website provided by the U.S. government.
The IRS offers a free, online assessment for anyone, including college students, that determines if you need to file a tax return or not.
Filing a tax return
According to a CNBC article, many qualify to file a simple tax return, a type of tax return for people that don’t have diverse financial assets.
Most students typically file a simple tax return if they earn income, as reported by their employer on a yearly W-2 statement, or if they earn income through unemployment compensation.
Those who are self-employed, freelancers, small business owners, own rental properties or acquire earnings from investments like stocks and bonds don’t qualify for a simple tax return and must file a complex tax return.
After you’ve obtained your tax documents, one of the easiest ways to file your taxes is through an online software. Tax softwares like TurboTax, FreeTaxUSA and Credit Karma Tax walk users step-by-step through the tax filing process.
No matter which software you use, each one is easy to use for students who are filing taxes on their own, and perhaps for the first time.