April 17 is just about three months away and W-2s and 1098-Ts have began to arrive in student’s campus mailboxes. That means it is time for students to file federal and state income taxes.
The process of filing taxes is fairly quick and not too difficult; however, it can be intimidating for some students, especially first-time tax filers.
This article is meant to assist in decreasing that stress level.
For most students, income tends to be relatively low and some students may wonder if they even need to file their taxes. Anyone can visit www.irs.gov to find out if their income level is high enough to file taxes.
First, individuals must file two forms of taxes: state taxes filed with the California Franchise Tax Board and federal taxes filed with the Internal Revenue Service.
The most common forms that students will need to fill out are the 540 2EZ for state taxes and the 1040EZ for federal taxes.
In order to complete these forms quickly and accurately students need to keep their W-2s, 1098-Ts and bank statements on hand.
Students must also decide if they are going to be filing as dependents of their parents or as independent.
This is important in determining the amount they will receive in a return or what they will owe.
If students choose to fill out these forms manually, they can be downloaded and printed from www.irs.gov and www.ftb.ca.gov.
Students can also find instructions on those websites about how to fill out the forms. They must be completed and postmarked by the end of business on April 17.
The most common option for college students is to E-file their taxes through either the IRS and FTB websites or through secondary software such as TurboTax Online or H&R Block.
The first step in this process is to create a free account with the chosen software. It will be free to file federal taxes and there is generally a charge of around $25 to file state taxes.
Next, the process of filing begins. Most likely the first questions asked will be whether there were major life changes in 2011 including marriage, having a baby, buying a home and more.
Then there is a screen to fill in personal information including name, social security number, relationship status and dependent status.
The following screen will generally be a residency status screen to clarify in which state the taxes will be filed.
Next it is time to pull out the W-2 and any other statement of income forms, including income from unemployment and retirement plans.
At this point it becomes as simple as following the instructions and plugging in numbers from each box on the W-2, including the employer’s identification information, wages earned and taxes withheld.
It is important to ensure that if there is more than one W-2 or the student worked multiple jobs, all W-2s be input separately.
The program will then begin to calculate any possible refund or any necessary payment.
There are also screens to input any potential adjustments such as deductions or credits, which are unlikely for a college student. However, some students may be eligible for certain education credits so it is important to explore these options.
After those screens are completed, the federal forms will be electronically filled out and will require an electronic signature, which the programs can create.
The federal taxes can then be E-filed to the IRS and students can choose their payment method.
If they are receiving a refund, they can choose to have the money electronically deposited in their bank account, generally for a fee, or they can choose to receive a check in the mail for free.
The process is practically identical for state taxes and the program being used usually will automatically transfer the information from the federal forms to the state forms, making it a one-click process.
It is important to file taxes as quickly as possible and definitely before April 17. Taxes are not difficult but do not be afraid to ask for help.
Visit www.irs.gov for more information and helpful tips for tax time.