Student Life is such a blessing. They don’t bother about their real-life responsibilities. But when they are asked to file a tax return, many of the students get worried and need complete guidance that how can they avoid penalties if they don’t return their tax. That’s why, just for your assistance, I would like to share a few of the useful, informative, and easy 10 tax tips for students. There you go…
1. Is it Necessary to Pay the Annual Tax Return?
Annual Tax Return is necessary if the income you earn touches the $6,200 figure. This following figure considered a typical tax deduction and it becomes essential for you, otherwise, this is not necessary. But even so if you like to file taxes, then this is a great idea. One more thing, this file tax rule applies only if you earn by working somewhere i.e. office, shop, etc.
2.Are you Dependent on Any Guardian?
Before going for file tax, consult with the guardians you live and inform them so that they can claim if they want. Your file tax is only valuable and you can get benefit from it if all the income you want to file tax is yours. I mean if you are paid as an employee. If the amount you receive touches or increases by the normal tax deduction and 50 percent of the payment you get from your parents then you might not get any personal exemption. Thus, keep yourself and your parents on the same page.
3. Do you study in College?
If you are studying in college, then according to the American Opportunity Tax Credit, you are allowed to receive around $2,500. Such tax acclaims can help you bear up your higher education fee and college expenses. AOTC is available only for the under-graduation students. If you are a postgraduate student then Lifetime Learning Credit LLC supports you.
4. What is the Tuition and Fee Deduction Program?
If you don’t apply for both American Opportunity Credits and LLC then there is another option for you by which you can bear up your tax expenses and can claim it easily. This program is known as the Tuition and Fee Deduction Program.
5. How to do a Tax Return if you Job while Studies?
Most of the students face this problem. In that situation there is no need to hire an accountant. Just grab a 1040EZ Form, fill it, and save a lot of money and time. This is good for you if you do it online.
6. Is the Student Loan Interest can be Beneficial for you?
Yes! if you are willing to take student loan then this is such a great idea. Because student loan interest deduction might be declared if you don’t list up your taxes. By doing so, the deduction will begin from your gross income.
7.Does the Work-Study Program help you?
Work-study programs are really beneficial for students. Because the income they pay is basically the amount they already paid for your tuition fee. So, a work-study program pays you back only if you produce something meaningful for your University. This can help you to bear up your study tax expense.
8. Is the 529 Plan being a Good Idea or not?
A 529 Plan is really a good idea not only for students but also for everyone. The American Government and institutes allow you to save your money or investment for the future while opening a 529 Plan.
9. How to Resolve the Dual State Taxes Problem?
If you get your primary education from a different state and get higher or secondary education from a different state or the permanent address in another state and present address belongs to another state then you can face this dual state tax problem. You can’t pay taxes twice. In this situation you really need a tax professional.
10. Does the E-file Procedure Helpful or not?
According to the enhancement in technology, this is a great thing. You can save a lot of time while adapting the e-file procedure for your tax return. Not only for students, but this is also a good thing for everyone.