Tax season is upon us, and it can be a hard to sift through the complicated tax lingo we’re expected to understand for filing a claim. However, here are five things to know that should help you get started.
1. UWF Employees Get Perks
UWF employees get a discount if they file their taxes at the H&R Block located at 40 W Nine Mile Road. According to representatives at this location, this H&R Block office is partnering with UWF to offer a $25 discount for all UWF employees who file their taxes there. It pays to be an Argo!
2. Your Parents May be Able to Claim You
If you are a full-time student under the age of 24 and get over half of your financial support from your parents, they can claim you as a dependent on their taxes. Jim Kendall of Jackson Hewitt Tax Services said that in lieu of dependency credits, which are no longer available, your parents could claim you under the Qualifying Child rules of the Child Tax Credit.
However, your parents’ claiming you doesn’t mean you cannot still file for yourself. Kendall adds that “If you are working, you can claim yourself and get most of your tax withholdings back.” Just remember to indicate that someone else is claiming you as a dependent so that you and your parents don’t claim the same deductions. If you’re not sure who’s claiming what, talk to your parents first.
3. You Can Get Credits and Deductions
- Scholarships and Grants — Scholarships and grants are tax-free only if they do not exceed your education expenses, are used entirely for education purposes, and have not counted as payment for teaching, research projects or other services. If you use the money for something other than tuition, fees, equipment, or books, you must include the scholarship or fellowship grant in your gross income as these expenses are taxable.
- The American Opportunity Credit — This maximum annual credit of $2,500 is available for undergraduate students who have at least a half-time course load for an academic period. This amount of money is very attractive, but be careful about filing for this credit; if you make a mistake, you’ll have to pay the IRS back with interest and could be charged a fraud penalty.
- Student Loan Interest — If your modified adjusted gross income (MAGI) is less than $80,000, you may qualify for a deduction on the interest you paid for student loans. According to IRS.gov, “This deduction can reduce the amount of your income subject to tax by up to $2,500.”
- Veterans’ Benefits — If you are a veteran or dependent, you may be glad to know that payments for your education and training are tax-free, and you do not have to report them as income on your federal tax return.
4. You Will Need Specific Forms
For all education credits, you will need to file a 1098-T form. UWF provides these forms either electronically or by mail, according to the preference you have indicated. If you have worked, you will need to file a W-2 form which you can get from your employer. For the American Opportunity credit, you will need to file Form 8863, which you can download from the IRS.gov website.
5. Find an Expert if You’re Not Sure
The deadline for filing taxes is April 15th. You can file your taxes yourself, or you can use a tax professional. If you chose to file with an online tax service, keep in mind that if you make a mistake, you may be charged money to file a correction. You also cannot get an early refund if you file online. Online tax services are most ideal for people who have simple returns or who are adept at the tax-filing process. If you’re not sure how to file your taxes correctly, ask a tax professional or visit IRS.gov for more information.