For some of us, this is the first time that the infamous April 15th deadline has actually meant anything. If you are filing your taxes for the first time, make sure you are well informed before you make a date with the 1040EZ. Here are some things that college students and other first time-filers (and everyone else) will want to know about doing your taxes:
1. File them.
If you’re required to file then this isn’t optional – don’t think you can get away with not filing. You don’t want the IRS hunting you down years from now, and you don’t want your reputation tarnished if you ever decide to run for president. Even if you didn’t make enough money in 2012 to be required to file, if some of your paycheck was withheld for taxes, then you are most likely entitled to a refund. Filing taxes can be a hassle, but that $200 tax return is worth it.
2. Make sure you have everything you need.
Sometime in January or February, you got a bunch of funny looking forms in the mail from your employer and your bank. And if you didn’t, then your parents probably did. Round up all of your W-2s, 1099-INTs, and other mysterious forms, and download the correct income tax return form from www.irs.gov. You’ll probably want to use the 1040-EZ, unless you’re a business, have kids, made more than $100,000 in 2012, or earned more than $1,500 in interest. You’ll also want to have a calculator and some scratch paper handy, and an accountant-friend or parent on speed-dial.
3. Know what you’re owed.
The government has created some deductions and tax breaks to help ease the pain and offset the rising cost of college tuition. Learn about things like the Hope Scholarship Credit, the Lifetime Learning Credit, and the American Opportunities Credit, and figure out if you are eligible for one of them (encourage your parents to do the same). There are also deductions for interest paid on student loans. Do your research so that you don’t miss out.
4. Talk to your
parents.
While you’re home for Easter, be sure to ruin the joyous occasion by having an up front conversation with your parents about your family’s financial situation. Make sure you are all on the same page about your dependency status and tuition deductions. Only one person can claim those deductions, so you and your folks will have to fight over them. You’ll also need to figure out if your parents are claiming you as a dependent – if they pay at least 50 percent of your living expenses, then they have every right to.
5. Take your time.
You’ve had everything you needed since February, so theoretically you could have filed your return then. Chances are, you didn’t. April 15th will be here sooner than you think, and you’ll want to give yourself plenty of time to make sure you fill out the form correctly. This weekend, allot yourself a few hours to dedicate to carefully doing your taxes. Make sure you have enough time to be thorough – mistakes could be costly. When you think you’re done, double check. After you’ve double checked, wait a few days before mailing in the return. If this is your first time filing taxes on your own, have a parent or money-savvy friend or mentor look over your return for you.
Sources:
www.bankrate.com
www.dailyfinance.com
www.foxbusiness.com