5 Tips for Students Filing Taxes for the First Time

Many people filing their taxes for the first time this season are college students or recent college graduates. Here are five tips for students filing taxes for the first time, to help you tackle your first tax season. 

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   Call Your Parents

Even if you have gone away for school or graduated in the past year, your parents may still be able to claim you as a legal dependent for tax purposes. If they paid more than half your living expenses for the tax year, they will probably claim you as a dependent. Give them a call and find out before you file. 

2. Organize Your Documents

Take the time to make sure you have all your tax documents before you start the filing process. A few common documents for college students and graduates include: 

• W-2 Forms – A W-2 is a record of wages earned, and taxes withheld. You should receive one from every employer. Make sure your current and former employers have your address on file to ensure you will receive your W-2 in a timely manner. 

• 1098-T Form – This is a statement of any tuition payments made throughout the year. 

• 1098-E Forms – These forms from student loan lenders are a record of any interest paid on student loans. If you are surprised at how much interest you pay, you may want to consider refinancing or consolidating your student loans to get a lower rate. 

3. Take Advantage of Free Tax Preparation and Filing

The Volunteer Income Tax Assistance (VITA) program offers free tax preparation for people who earn less than $67,000 a year. You can go online to find a local VITA site. Or take advantage of the federal government’s FreeFile program and file your taxes from your dorm room. If your adjusted gross income is less than $84,000/year you are eligible to file your federal taxes online for free. 

4. Be Aware That You Might Have to File Taxes in Two States

If you’re one of the many students who chose a college outside your home state, you may need to file taxes in two states. For example, a resident of New Jersey attending college and working in Ohio will need to file state taxes for both New Jersey and Ohio. 

5. Take Advantage of Education-Related Tax Deductions and Credits

Several tax deductions and credits are available to help cover the cost of higher education: 

1. The American Opportunity Tax Credit (AOTC) – Offers up to $2,500 per student for qualifying education expenses. 

1. The Lifetime Learning Credit (LLC) – Provides up to $2,000 per tax return for eligible education expenses, even if you’re not a full-time student. 

1. Student Loan Interest Deduction – You may be able to deduct the lesser of $2,500 or the amount of interest you actually paid during the year. Your dependency status and income level may impact eligibility. 

Conclusion

Filing your own taxes is a significant step toward financial independence. Tax season is also an excellent time to review your finances, evaluate your spending habits, and explore ways to improve your financial future. If you have student loan debt, consider refinancing with a credit union or community bank to secure a lower interest rate and manage payments more effectively.