Navigating the difficulties of filing tax returns
DetailsCreated on Sunday, 25 March 2012 23:55 Hits: 991
The deadline to file federal income tax returns is April 17, and students who are filing their taxes for the first time may not be sure of the appropriate steps.
Maryellen Hinchman, senior tax advisor at H&R Block in Kent, said the first and most important thing students should do when filing their taxes is to have a conversation with their parents.
If a student is under the age of 24, parents are typically entitled to claim them as dependents — but there are always exceptions, Hinchman said. Students may claim themselves if they receive no support from their parents. There are specific laws that make it difficult to draw a definite line about students’ ability to claim or be claimed, Hinchman said.
Ryan Allen, franchise owner and enrolled agent at Liberty Tax Service, said a single person (someone who is not claimed by anyone) is only required to file taxes if they make $9,500 or more in taxable income. If a student is claimed by a parent, the student still needs to file if they make $5,800 or more in taxable income. Allen said in most cases the parents will take care of everything for the student, but not all of the time.
“The best rule is to always check with a parent,” Allen said.
A lot of times parents will accompany the student to a meeting with a tax consultant, even if they are not claiming the student any longer. Hinchman said it’s a complicated process and even parents aren’t aware of how to take full advantage of the returns they could receive.
Hinchman said a lot of students and parents aren’t aware of the education credit they can get back if they file their taxes correctly. On Feb. 28 Hinchman had six parents who weren’t aware of this return who collectively received about $10,000 from that return alone.
Allen said the education credit is most beneficial for parents to file in their tax returns, but there are certain rules associated with it. In order to be eligible for the return, a student’s tuition has to exceed the amount of grants and scholarships they receive.
“Most college students cannot take the best advantage of this tax return,” Hinchman said. “Typically students can get about $1,000 back, but parents can sometimes receive about $2,500.”
Allen and Hinchman both said they’ve seen a growing trend in the amount of people who file their taxes online, but neither recommends it. Allen said a lot of people miss certain credits or aren’t reporting all of their income when they file taxes online. Students also need to make sure that if they do file their own taxes that they file federal, state and local taxes, Hinchman said.
Allen said students need to make sure they gather the appropriate documents before filing their taxes online or setting up an appointment with a tax agency. Students need to have their 1098 tax forms, which can be found on the Kent State FlashLine page in the “my account” tab under “my student accounts” on the right side. Students also need to have their 1099 and W2 tax forms.
Once a student sits down to meet with an agent, they will go through an extensive interview process, Allen said. This will help the agent figure out what exemptions and deductions the student is eligible for because it varies from person to person.
“If students have any questions about what to do they can always call the IRS or a tax professional,” Allen said. “Any tax agency will provide free advice about how to get started.”