Heading into adulthood comes with its own set of milestones, and filing taxes for the first time is definitely one of them. If you’re a college student preparing to tackle this task, there are a few factors that you might need to consider like scholarship funds, 1098-T forms, and education credits. Good news! This guide is here to walk you through the tax filing process step-by-step and help you file your taxes as a student with confidence.
Key takeaways on filing taxes as a college student
- Not all college students must file taxes — It depends on income and specific IRS requirements.
- Your scholarship may be non-taxable — Scholarships used for tuition and direct educational expenses are not taxable, but those used for room, board, or study abroad may be.
- Claim eligible education tax credits — Eligible students can benefit from the American Opportunity Tax Credit, Lifetime Learning Credit, and the student loan interest deduction.
- Understand whether you are still being claimed as a dependent — Full-time students can be claimed as dependents by their parents until age 24, even if they file their own tax returns. If taxes were withheld from a paycheck, filing a tax return could result in a refund, even for students claimed as dependents.
Do college students have to file taxes?
Whether or not you’re required to file a tax return really depends on how much your annual income was and if it is considered earned or unearned income. For tax purposes, earned income includes all the money you make from jobs, whether working for someone else or running your own business. If you’re earning an income, either from a part-time job on campus or a summer internship, you’ll need to consider filing a student income tax return if your earned income exceeds the minimum income to file taxes, which is essentially the standard deduction for your filing status.
Beyond wages, you should also be aware of unearned income, which includes interest, dividends, or investments. If you have more than $1,100 in unearned income, you may be required to file even if you don’t make more than the standard deduction.
Even if you don’t have to file, it may be worth doing. You could qualify for important tax credits or get money back from taxes that were withheld from your paychecks if you’re working. You can even file for previous years to claim refunds you may have missed.
What you should consider when filing taxes as a student
Here’s a little guide to help you figure out what you should consider before doing taxes as a college student.
- What is your filing status? Your filing status determines your tax rate and standard deduction. Many college students file as single, but if you’re married, you’ll need to consider whether to file jointly or separately with your spouse.
Why does your filing status matter? Your marital status affects the standard deduction amount you’re eligible for, which can significantly impact your taxable income. For singles, the standard deduction might cover most, if not all, of your income, potentially making your taxable income very low or even zero.
- Are you claimed as a dependent on another return? If your parents or someone else can claim you as a dependent, it could affect your ability to claim certain tax credits or deductions.
Why does your dependency status matter? The IRS requires you to indicate if you are being claimed on another return. So, it’s essential to communicate with your family about this to ensure the information reported on your tax return is accurate.
- Does your state have an income tax? Not all states have an income tax, but if yours does, you’ll need to file a state return in addition to your federal return. State regulations and deductions can vary, so check your state’s tax website for specifics.
- Did you support others in your household, or do you have dependents? If you financially support someone or have children, you might be eligible for additional credits, such as the Child Tax Credit, which can lower your tax bill or increase your refund.
- Does your employer withhold taxes? If you’ve worked a part-time job or had a summer internship, check your pay stubs to see if your employer withheld taxes from your paycheck. If your withholdings are less than your tax bill, you might owe money when you file your taxes. Conversely, if your withholdings exceed your tax bill, you could get a refund.
What tax forms for students do I need to file taxes?
Understanding what documents are required when filing taxes as a student is the first step in a smooth tax season. Here’s a list of documents you might need to get started:
- W-2 Forms – These forms are issued by your employer and show how much money you’ve earned, and the taxes withheld from your paycheck.
- 1098-T Form – You’ll need your Form 1098-T to claim education credits like the American Opportunity Credit or Lifetime Learning Credit. The 1098-T shows how much you paid to your school for tuition and other qualified expenses. It also reports information about scholarships. The 1098-T will come from your school.
- 1098-E Form – If you’re paying back student loans, you’ll receive this form indicating how much student loan interest you’ve paid over the year, which might be deductible.
- 1099 Forms – If you are self-employed, look for a Form 1099-NEC from anyone who has paid you more than $600. For freelancers or gig economy workers, 1099 forms show income from work that doesn’t fall under traditional employment.
Note: If you don’t get a Form 1098-T because your school isn’t required to send one, you just need to prove that you were enrolled at an eligible educational institution and paid tuition and other qualified education expenses.
Tax forms for international students
If you’re an international student and you’re required to file taxes, you will need to use Form 1040-NR or 1040-NR-EZ, assuming the IRS does not consider you a resident for tax purposes. You can file these forms using either your Social Security number (SSN) or, if you don’t have one, an Individual Taxpayer Identification Number (ITIN).
You should also explore any treaty benefits that could apply, which may mean you are exempt from paying U.S. taxes. If you’re an undocumented student without an SSN, you’ll need to apply for an ITIN to file your taxes.
Are there tax breaks for college students?
Yes! Your status as a college student might make you eligible for education tax credits and deductions.
- The American Opportunity Tax Credit (AOTC) is worth up to $2,500 per year for an eligible college student. It is refundable up to $1,000, which means you can get money back from the credit if you do not owe any taxes.
- The Lifetime Learning Credit is worth up to $2,000 per year. It is not refundable, but it can still reduce the amount of federal income tax that you have to pay.
- The Student Loan Interest Deduction allows you to deduct up to $2,500 in interest paid on your school loan.
How to file taxes as a college student
The key to a smooth and successful tax filing is understanding the steps to complete your return. Here’s an overview of the steps for taxes for college students.
Step 1 — Determine if you must file: The IRS bases filing requirements on your filing status, total income, and whether that income is considered earned or unearned.
Step 2 — Gather all necessary tax documents: Tax forms you may need to file include W-2 forms from employers, a 1098-T form from your college for tuition payments, and any documentation for scholarships or grants.
Step 3 — Decide whether to itemize or take the standard deduction: Most students choose the standard deduction because it’s simple and often gives you the biggest benefit if you don’t have many deductible expenses. Itemizing makes sense if your deductible expenses (like medical costs) exceed the standard deduction amount. The decision to itemize or take the standard deduction does not impact your eligibility for education credits.
Step 4 — Choose the best software to meet your needs: TaxSlayer makes it easy for college students to file taxes. We will ask you easy questions about your income and any life events that could qualify you for specific credits and deductions. Then, we automatically calculate your tax return and populate the appropriate tax forms based on your entries. This ensures you receive every dollar you’re entitled to in your tax return.
Is there a student discount filing with TaxSlayer?
TaxSlayer offers a free federal tax filing option for people who are filing a basic 1040 return. Generally, you can qualify to use TaxSlayer Simply Free if:
- You are filing with a W-2
- You are filing as single (or married)
- You are not claiming dependents
- You are taking the standard deduction
Review these additional requirements to see if you qualify to use Simply Free!
Do I need to pay taxes on my scholarship?
In general, scholarship money that is used to cover tuition costs and other direct education expenses isn’t considered taxable income. But if your scholarship or grant money is used to pay for unqualified expenses – such as a study abroad program or your general room and board – you would need to report that on your tax return.
Should I file taxes even if someone claims me as their dependent?
If you are required to file a federal income tax return–say, because you earned more this year than the standard deduction amount–you will simply indicate that someone else can claim you as a dependent in the appropriate section on your return. If someone claims you as a dependent, you will mark that in the Dependents section of your Form 1040.
If you don’t meet the income requirements to file, but your employer withholds money from your paycheck for income taxes, you might be entitled to a tax refund. The only way to get your refund is to file an income tax return. In that case, you’ll want to go ahead and file.
Use TaxSlayer’s Refund Calculator now to estimate how big your tax refund will be.
Can I file taxes as a side hustle?
Preparing tax returns for clients is a real profession, and you can also prepare them part-time/seasonally. However, there are some rules and legal regulations to know before you go filing taxes for someone else.
Side hustles can boost your income, but they also add some complexity to your tax return, so keep detailed records of what you earn and any related expenses, so you’re prepared when it’s time for you to file.
