College students who earn more than $4,750 a year have more to worry about this spring than research papers and final exams. It’s tax season, and time to file tax returns. Nellie Mae, a company specializing in student loans, offers tips to guide college students through the federal income tax filing process:
* Even though full-time dependent students earning less than $4,750 a year do not have to file a tax return, they may want to anyway. According to the Internal Revenue Service (IRS), 70 percent of all individuals who file a tax return get a refund. A student’s tax return will also come in handy when completing the Free Applicaiton for Federal Student Aid (FAFSA).
* Filing taxes over the phone or online saves time. If using the Internet, students can find information on free e-filing opportunities at the IRS’s e-filing Web site, www.irs.gov/efile/index.html. After e-filing, students can check their refund status online.
* Students should keep a copy of their tax return information for their own records, because they will need that information when applying for federal financial aid. FinMan, an online financial management tips program offered by Nellie Mae at www.nelliemae.com/finman, offers these additional tips:
* Students should make sure they have all of their W-2 forms before filing, especially if they had more than one job. Employers were required to mail W-2 forms to employees by Jan. 31.
* Independent freshmen or sophomores may qualify for the $1,500 Hope Scholarship credit. Independent college students past their sophomore year may qualify for a Lifetime Learning credit of up to $2,000.
* Independent students or parents claiming the student as a dependent who made interest payments on a student loan during 2003’s tax year may be able to deduct up to $2,500 of interest from their income subject to tax. To qualify, proceeds of the loan must have been used for higher education expenses, which includes tuition, fees, room, board and books and supplies.
More information can be found at Nellie Mae’s FinMan Web site, www.nelliemae.com/finman
– Compiled by Jen Nelson
