Tax season looms over students

Posted on Mar 9 2014 - 11:15pm by Guest Writer

By Jillian Stanphill, Business Writer

Tax season has begun, and the deadline of April 15 is quickly approaching.

This can be a daunting time of year for many people, especially college students who may be filing their taxes for the first time. But there is no need to fear, as there are abundant resources available to help get through taxes.

The United Way of King County is running a free tax preparation campaign to offer help and guidance through the process. There are 19 locations across King County for one-on-one help, as well as an easy guided walk through online through http://myfreetaxes.com/kingcounty for those unable to make it to one of their sites.

United Way provides easy-to-understand materials and great deduction tips, along with friendly volunteers to ease the stress of filing taxes.

It’s important to not procrastinate on taxes, no matter how tempting putting them off sounds. The more time and effort you put into the paperwork, the more time you have to edit and fix mistakes. This will prevent frustration and maybe lead to a bigger refund check in the future.

College students get special deductions when it comes to education costs. There are three main educational deductions for college students, but only one can be applied.

The Hope Scholarship Credit is applicable to the first two years of college and has a maximum credit of $1,500. The Lifetime Learning Credit has a maximum credit of $2,000 and is based on the percentage of tuition. The Higher Education Expenses deduction has a maximum 0f $4,000, but the actual amount in credit will be around $1,000.

These are also applicable to parents’ taxes based on who is paying the tuition and whether or not they have claim over their students as dependents.

Out-of-state students also need to determine which state to file a return in, or if they need to file in both. Work study programs are taxable too, so talk to the program coordinator to see how those earning should be filed.

There are two different types of scholarships and fellowships — those that are qualified and non-qualified.  A scholarship or fellowship is qualified tax-free if it is used to pay education expenses, i.e. tuition, books and required supplies, and at an eligible education institution.

A non-qualified scholarship or fellowship is any expense that is not required such as travel or room and board. For more information, research the ‘Tax Benefits for Higher Education’ under IRS Publ. 970.

Taxes may not be exciting, but everyone should give them appropriate consideration and thought by making sure they are filed correctly by April 15.