Unless you’re an accounting major, filing taxes may not be your idea of a good time. But if you don’t file, you may end up leaving a lot of money on the table. If you’re going to file taxes for the first time this year, here are a few tips to make this task easier and less stressful:
• If taxes were withheld from your paycheck, even if you only earned a little money, file your taxes so you can get some of that money returned to you.
• If you earned more than $10,400 in 2017, you must file a tax return.
• You’re eligible for at least 3 tax breaks in the years you pay tuition: The American Opportunity Tax Credit, the Lifetime Learning Credit, and the tuition and fees deductions.
• If your parent still claims you as a dependent, you must mark off “I can be claimed on someone else’s return” on your form.
• File early. Waiting until the last moment will only make the process more stressful.
• You can file your Federal taxes for free and online by going to www.irs.gov. There are other free filing websites, found easily through an online search.
• You’ll have to pay state taxes to each state you are a resident of during the tax year. If you attend college in one state but live in another, check the residency requirements to see if you qualify as a resident or nonresident of the state in which you attend school.
Here are the forms you’ll need to file your taxes and get your returns:
• W-2: Your employer will give this to you. It’ll show any taxes that were withheld from your paycheck.
• Form 1098-T: Your college will send you this tuition statement. It includes information you’ll need to claim education credits.
• Form 8863: This is another form that will tell you if you qualify credits like the American Opportunity Credit and the Lifetime Learning Credit.
• Form 1098-E: Use this to deduct the interest you paid on a qualified student loan during the tax year. Your lender will send this form to you if you paid more than $600 in interest.
Filing taxes may seem like a boring chore, but if you don’t, you’ll miss out on a nice tax return. And who wouldn’t like a little extra cash in their account? Hm?
Copyright 2018 Credit Union National Association Inc. Information subject to change without notice. For use with members of a single credit union. All other rights reserved.