Impress your friends and family, by learning how to file your own taxes
For many college students, the only thing more stressful than classes, exams and papers is money. Paying bills, buying groceries and still having some cash left over for the weekend is not easy to do with a part-time job. But no matter how much (or how little) money you have, you will more than likely have to add another onerous task to your already hectic schedule this semester—filing your taxes.
Which form should I use?
Although filing taxes may seem foreign and intimidating for those who have never done it, UW-Madison professor of Public Affairs and Applied Economics Andrew Reschovsky said the process is fairly straightforward\ for most students. He recommended using a form called a 1040EZ, which is only one page, hence its name, and much easier to fill out than the standard 1040 form. If your income comes only from working and interest on a bank account, this is the form for you.
However, if you have accounts such as mutual funds earning dividends or make most of your money from babysitting or mowing lawns, you may need to use a 1040 form. In this situation, Reschovsky recommends investing in TurboTax or another tax preparing program. The best way to figure out what forms you need is to visit the IRS website, www.irs.gov.
How do I know if I'm a dependent?
If your parents pay more than 50 percent of your expenses, you are considered a dependent. This includes tuition, rent and any other expenses you may have, such as food and gas. If you are filing a 1040EZ, make sure your parents claim you as a dependent on their forms too or you will both get letters from the IRS.
Do I still have to file if I don't make a lot of money?
If you made less than $4,850 last year and are an unmarried dependent, you technically do not have to file. But not filing also means not getting back the money that your employer withheld, even if it isn't much.
UW-Madison senior Alison Reveille filed her taxes early and has already received her returns, the only fun part of the tax process. She got back more than $500 and was able to put the money toward her spring break trip to Florida.
""It's nice because it's money you don't even really realize you have,"" she said.
Can my folks do my taxes for me?
Although many students just sign their tax forms and let their parents do the rest, learning to do them now has its advantages. Reschovsky recommended sitting down with your parents and filling them out together to learn ""what the taxes are and how you file them.""
Phil Wacker, also a UW-Madison senior, has filed his own taxes since he turned 18. He said doing so has made him more independent and he thinksstudents should learn to do their taxes.
""I'm glad that I don't depend on my parents to do my taxes for me, because sooner or later you'll have to do it for yourself,"" he said.
What is considered income?
Any money you earn by working is considered income, whether it comes waiting tables or shoveling snow. Although jobs like babysitting are most often paid in cash, they are not exempt from taxation. You may not think to claim this income, but if you made more than $400 in cash last year, you are subject to self-employment tax.
""There's no question that the law says that that's income and you are subject to taxation,"" Reschovsky said. ""But any expenses you have, [such as] the driving over to work, you can take off against your taxes.""
Where can I get help filing my taxes?
Volunteer Income Tax Assistance is available in Madison for low-income individuals, including students. Volunteers are trained by the IRS and offer free walk-in service Mondays, Wednesdays and Saturdays at the Financial Education Center, 2300 S. Park St. Call 261-5077 for information.
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