Students likely eligible for tax credit
As tax season deadline approaches, students shouldn’t be nervous to file – in fact, they should be excited for the benefits they can receive, said Bonnie Villarreal, an accounting lecturer in the school of business.
“You contribute enough toward government spending with your payroll taxes,” Villarreal said, adding that if students don’t file their taxes, the government keeps any money that would’ve otherwise been refunded.
For this reason, Villarreal said, it is important for all USU students to file their taxes, especially if they don’t owe any money.
“If you had any taxes withheld, you have to file a tax return to get it back,” Villarreal said. “But even more important, there are some tax credits that may give you a refund even if you didn’t pay in any money.”
Britta Anderson is a USU student who said she stumbled across a credit such as this. A senior studying broadcast journalism, Anderson said she didn’t think she would qualify for a return because she didn’t owe anything to the government.
“I actually wasn’t going to file because I was marked tax exempt, but then my parent’s tax man was like, ‘Well, can she qualify for education tax credit?'” Anderson said.
After filling out some paperwork, Anderson said received a $1,000 tax return in the mail after a short wait.
Jodi Miller, an accountant for the local Volunteer Income Tax Assistance (VITA) service, said some students qualify for big returns and some do not – it just depends.
“There really is no magic number as to what a return will be,” Miller said. “It all depends on filing status, household size, income, age and other demographics.”
The biggest tax benefits going for students are the education credits available, said Cody Webb, accountant for Cook Martin Poulson.
Webb said the two major education credits available to students are the American Opportunity Credit and the Lifetime Learning Credit.
Students must be enrolled for at least six credit hours per semester and be working toward a degree to qualify for the AOC. Webb said funding is allocated up to four times and is not available to students who have completed four or more years of college.
Despite the restrictions, Webb said this is a credit students should watch out for. With a potential payoff of $2,500 and four opportunities to receive it, Webb said this credit goes a long way to helping college students.
“It is a remarkable credit and the main reason a lot of students get a big chunk of money refunded on their tax returns,” Webb said. “This is the biggest and most beneficial credit for undergraduate students.”
Webb said students who attend college for more than four years, finishing their undergraduate degrees or pursuing degrees beyond a bachelor’s, may want to look into the Lifetime Learning Credit instead. There is no limit to the amount of times a students can claim the LLC, but the maximum credit threshold is set at $2,000 per year.
Whatever credits students choose to pursue, Webb said they can benefit from filing taxes when they consider their options.
“Most students get a pretty good refund back depending on a few different things if they are smart,” Webb said. “It all depends on whether or not the students are claimed by their parents and if the student is receiving any scholarships or not, among other variables.”
Webb said he suggests all students keep track of receipts for things like books and school supplies.
“It is just a little thing that can end up helping them a lot to maximize the education credits on their tax returns,” Webb said. “The more organized students are throughout the tax year with their money and keeping track of things, the less stressful taxes will be when they file them in the spring.”
Miller said she suggests students educated themselves about taxes.
“You don’t want to just take your information to an accountant and hope they do it all right,” she said. “You need to be able to look at your taxes and know why you are getting a refund or having to pay. Everyone really should have some knowledge about taxes. Try and find a way to become educated.”
– brianna.b@aggiemail.usu.edu