What You Need to Know Before You See Your Tax Preparer -- Because We’re Just Care Package Makers, After All!
It’s time to file 2020 taxes, which means it’s also time for hundreds of tax-related questions swirling in your head, and going unanswered all too often. And while it’s best to ask a tax professional for their advice, the student care package experts at My College Crate have scoured the internet for information relevant to college students and income tax to help point you in the right direction and maybe aid you in figuring out what you should be asking about.
(And parents — if you end up with a refund, you might want to send a college care package your kid’s way! We think it’s the best use of that money.)
What’s the difference between a tax return and a tax refund?
The tax return is the form you file. The refund is the money you may be eligible to get back after you file.
Do college students need to file taxes?
The straight answer is “it depends.” If their 2020 income was less than $12,200, the standard deduction for taxes filed in 2020, they aren’t required to file. However, if they worked and had income taxes withheld from their paychecks, they might want to file just in case they are eligible for a refund of some of it. Keep reading for more reasons to file a tax return.
Which tax forms should college students receive?
College students should watch for tax forms they may be receiving from any jobs or gigs they worked, plus for their education. Students who worked part-time (or full-time) jobs will receive a W-2 from their employer. They may also receive a 1098-T for expenses paid to their school, a 1098-E for student loan interest payments, or a 1099, if they worked a gig job, like Doordash or Instacart.
These forms could be mailed to the student in hard-copy form, while other companies and schools offer them for digital download.
Can parents claim their college student as a dependent?
We have another really great straight answer for you: maybe. When college students are listed on their parents’ return as a dependent, their parents may get certain tax benefits. Talking to your tax professional will help you determine which route is best financially for your family to take.
To qualify as a dependent, college students must meet certain age, relationship, and financial support requirements. Usually graduate students do not meet these requirements, but undergraduate students do.
Students who aren’t claimed as dependents on their parents’ tax returns may be eligible to claim certain educational tax credits for which their parents may earn too much money to qualify for, like the American opportunity tax credit, or AOTC. Of course, parents earning below a certain income threshold could get this tax credit. Graduate students may be eligible for even more money back if they can deduct certain school expenses, such as tuition and fees.
If parents don’t claim their student as a dependent, does that change their FAFSA filing?
The way taxes are filed doesn’t necessarily dictate dependency status on the Free Application for Federal Student Aid (FAFSA). You’ll want to carefully read through FAFSA guidelines for more information.
Do college students need to pay to file a simple tax return?
In short, unless you prefer to hire a tax professional to complete and file your taxes for you, you can file them for free yourself using online software.
Simple tax returns often can be filed for free online; a list of these free softwares is available through the IRS website.
College students on campus may also be able to get help through a volunteer tax assistance program through their university’s accounting school, so watching for information about a program like that can ease a lot of frustration.
What’s more fun than filing taxes? College subscription boxes!
Your college student is looking forward to becoming a fully-fledged grown up, but when they prepare their own taxes for the first time, they might not love “adulting” quite so much.
Keep ‘em feeling youthful and happy by sending them one of our college subscription boxes each month, from My College Crate. We assemble quality, fun-filled care packages for college students or prep school students and ship them to their dorms or apartments. They’re ideal one-time gifts, and equally amazing to keep them feeling your love from home as they learn and grow.
What are you waiting for? Prepare your taxes – and send your student a college care package from My College Crate – today.
Connect with Parents Like You in Our Facebook Group
When you order one of our college care packages, we’d like to extend an invitation to you to join our special Facebook group, Parents of College Students Advice & Tips! In this group, you’ll find helpful advice for parents of high school seniors and college students, from other parents like you. Plus, you might find some exclusive offers for our care packages, too. Come hang out with us on Facebook! Join now.
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