Filing taxes as a student or as a parent of a student in the U.S. can be complex. To ensure accuracy and avoid common mistakes, consider the following guidance based on information from the Internal Revenue Service (IRS):
For Students:
Determining Filing Requirements: Even if your income is below the standard deduction, you might still need to file a tax return, especially if you had taxes withheld from your paycheck and are eligible for a refund. The IRS provides guidelines to help determine if you're required to file.
Accurate Reporting of Personal Information: Ensure that your Social Security Number (SSN) and name on the tax return match exactly as they appear on your Social Security card. Discrepancies can lead to processing delays or rejection of your return.
Claiming Education Credits Correctly: The American Opportunity Tax Credit (AOTC) and Lifetime Learning Credit (LLC) offer valuable tax benefits. However, common mistakes include:
Claiming the credit when the student is listed as a dependent on another tax return.
Not having Form 1098-T from the educational institution.
Claiming non-qualifying expenses, such as room and board.
Attempting to claim both credits for the same student.
Filing without a valid SSN, ITIN, or ATIN for the student.
For detailed information, refer to the Taxpayer Advocate Service's guidance on education credits.
Understanding Dependency Status: If your parents claim you as a dependent, you cannot claim certain credits on your own tax return. Coordination with your parents is essential to prevent errors.
For Parents:
Accurate Claiming of Dependents: Ensure that your child's SSN and name are entered correctly on your tax return. Errors can lead to rejections or delays.
Coordinating Education Credits: Only one taxpayer can claim the AOTC or LLC per student per year. Miscommunication can result in both the parent and student attempting to claim the same credit, leading to processing issues.
Avoiding Common Errors with the Earned Income Tax Credit (EITC): If you're eligible for the EITC, be aware of common mistakes, such as:
Claiming a child who doesn't meet the qualification rules.
More than one person claiming the same child.
Incorrectly reporting income or expenses.
The IRS provides detailed information on common errors related to the EITC.
Timely Filing and Payment: Missing the tax filing deadline can result in penalties. If you cannot file on time, consider requesting an extension. If you're unable to pay the full amount owed, the IRS offers payment plans to help manage your tax obligations.
By carefully reviewing these areas and consulting IRS resources, both students and parents can navigate the tax filing process more effectively and avoid common mistakes.