Get ready for tax season
The new year brings tax season and not all students have to file a return, but some do. If you’re not sure whether you’re included in those who do, you can visit the IRS site to find out. Tax season brings unhappy thoughts into most minds, but when you’re a student, it can be a good thing. Most students aren’t required to pay taxes so anything that was withheld will be refunded to you. Unless you claim exempt on your W2 form at work, taxes are withheld from your paycheck. Some people even fill it out so the IRS takes out more than they should so they can get a bigger refund (this is what I do – I treat it as a savings account because I find it’s hard for me to do it on my own).
Filing isn’t tricky either. Services like TurboTax make things so much easier. If you’ve paid interest on any student loans, you can claim up to $2,500 as a deduction. While this doesn’t help students who don’t have to pay any taxes (like myself), it is helpful for those who do and for those who are out of college.
Preparing your return
- TurboTax, which is made by powerful software company, Intuit, is the leading tax preparation software. The basic edition is $20, but there’s also a free online edition for 1040EZ filers (most common, unless you’re utilizing deductions, you’ll most likely fall under this category).
- IRS eFile – The IRS allows you to prepare and file your tax return electronically.
- H&R Block, Jackson Hewitt, etc. – These tax preparation companies are another alternative to filing for yourself, but if you’re a student, your return isn’t going to be complicated and these places aren’t cheap. Not a good idea for most people.
- Mail – you mail it off, it’s free, but it can take up to six weeks for your refund
- TurboTax efile with direct deposit – $14.95, can get your refund in 9 days
- IRS FreeFile – if you qualify for FreeFile (made $54,000 or less in 2007), you can file your return electronically with the IRS for free. You can set up direct deposit and get your return in 10 days.