Understanding Tax Filing Requirements For University Students

College students face several considerations when it comes to filing taxes. The requirement to file a tax return depends on income and whether taxes were withheld from paychecks. Single students who earned more than the standard deduction amount in 2023, which was $13,850, must file an income tax return. This includes earned income from employment and unearned income, such as investments. Students who earned less can still file a return to claim a refund of taxes withheld by their employer. Additionally, students with self-employment income exceeding $400, or unearned income such as interest and dividends exceeding $1,250, are also required to file. The requirement to file taxes also depends on whether the student is claimed as a dependent by their parents. If claimed as a dependent, the student's parents may be eligible for tax credits such as the American Opportunity Credit. College students may benefit from tax breaks and credits, such as the Tuition and Fees Deduction, the American Opportunity Tax Credit, and the Lifetime Learning Credit.

Do college students need to file taxes?

Whether or not a college student needs to file taxes depends on several factors, including income, age, and dependency status.

Firstly, if anyone claims you as a dependent on their taxes, such as your parents, you may still be required to file a tax return. It is important to discuss this with your parent or guardian before filing. If you are a dependent who is unmarried, under 65, and not blind, you must file a tax return if your unearned income (taxable interest, capital gain distributions, unemployment compensation, and taxable Social Security benefits) was more than $1,150, or if your earned income was more than $12,950.

If you are not claimed as a dependent, you must file a tax return if you made over $12,950 in 2022. This threshold increases to $25,900 if you are married and filing jointly, but married couples filing separately are required to file if they make over $5.

Additionally, college students may want to check if any portion of their scholarship or grant is taxable if used for incidentals like room and board or travel. Filing a tax return may also be beneficial for college students, even if they are not legally required to do so, as they may be entitled to a refund if income tax was withheld from their earnings.

College students who are single and earned more than $13,850 in 2023 must file an income tax return. Students who earned less can still file a return to claim a refund of taxes withheld by their employer. Students with a more complicated tax situation, such as having a child or qualifying for the Earned Income Tax Credit (EITC), may have additional incentives to file a tax return.

There are also various tax breaks available for college students, such as the Tuition and Fees Deduction, which can lower taxable income by up to $4,000, and the American Opportunity Tax Credit (AOTC), which is worth up to $2,500 per year and is refundable for up to $1,000. The Lifetime Learning Credit is another option, worth up to $2,000 per year, although it is not refundable.

To file taxes, college students will need various tax forms, including Form 1040, Form 1098-T (Tuition Statement), Form 1098-E (Student Loan Interest Payments), Form 8863 (to determine eligibility for tax credits), and Form W-2 (if you made over $600 at work).

In summary, the requirement for college students to file taxes depends on their income, age, and dependency status, and there are various tax breaks and benefits available to students when filing their taxes.

What is a dependent?

Whether or not a college student needs to file taxes depends on their gross income and if their parents can claim them as a dependent. A dependent is a qualifying child or relative who relies on someone else for financial support. To be considered a dependent, the individual must meet specific requirements.

Firstly, a dependent must be a U.S. citizen, resident alien, or national, or a resident of Canada or Mexico. They must not be claimed as a dependent on more than one tax return, and they cannot claim a dependent on their own tax return. Additionally, a spouse cannot be claimed as a dependent if filing jointly.

To qualify as a dependent, a child must meet the following criteria:

• Relationship: The child must be the son, daughter, stepchild, eligible foster child, brother, sister, half-sibling, step-sibling, adopted child, or the child of one of these.
• Age: The child must be under 19 years old or under 24 if a full-time student, or any age if permanently and totally disabled.
• Residency: The child must live with the person claiming them for more than half the year, with some exceptions.
• Support: The child must receive more than half of their financial support from the person claiming them.
• Joint return: The child must not file as married filing jointly unless only to claim a refund of taxes paid or withheld.

If a child meets the above requirements, they can be claimed as a dependent on a tax return. It is important to note that even if claimed as a dependent, the child may still need to file their own tax return, depending on their income, marital status, and other criteria.

What is the income threshold for filing taxes?

The income threshold for filing taxes depends on several factors, including filing status, age, and income type. Here is a breakdown of the income thresholds for different scenarios:

Single Students:

• Gross Income: In 2023, single students under 65 generally needed to file taxes if their gross income was at least $12,950 in 2022. This includes earned income (from jobs) and other payments like tips or dividends.
• Earned Income: If a student's earned income exceeds $12,950, they may need to file a tax return.
• Unearned Income: If a student has more than $1,100 of unearned income (such as a college fund in their name), they may need to file a tax return.

Married Students:

• Joint Filing: Married couples filing jointly must file taxes if their combined income reaches a certain threshold, which was $25,900 for couples under 65 in 2023.
• Separate Filing: If married couples file separately, each spouse needs to file taxes if they made $5 or more.

Dependents:

If a student is claimed as a dependent by their parents or guardians, different income thresholds apply:

• Earned Income: A dependent student under the age of 65 needs to file a tax return if their earned income exceeds $12,950.
• Gross Income: For dependent students, the threshold is based on their gross income exceeding $1,150 or their earned income plus $400, whichever is higher.
• Self-Employment: Dependent students who are self-employed and made more than $400 must file a tax return.

State Taxes:

In addition to federal income tax, students may need to consider state tax requirements. Each state has its own rules, and students who worked in multiple states may need to file multiple state tax returns.

International Students:

International students have different tax requirements and should refer to specific guidelines provided by the IRS or a tax professional.

It is important to note that these thresholds are subject to change over time, and students should refer to the most recent guidelines provided by the Internal Revenue Service (IRS) or consult a tax professional to understand their specific situation.

What tax forms do students need?

Whether or not you need to file taxes as a college student depends on your gross income and whether your parents can claim you as a dependent. If you are a single, dependent student, you need to file a tax return if your earned income exceeds $12,950 or your gross income exceeded $1,150 or your earned income plus $400, whichever is higher. If you are single and not a dependent, you will need to file a federal return if you earn more than the standard deduction amount (in 2020, this was $12,400).

If you are filing taxes as a student, there are several forms you may need to fill out. Here are some of the key forms:

• 1040: This is the basic income-reporting form that nearly everyone uses. You may have to complete multiple add-ons called schedules. You should complete Schedule 1 if you made student loan payments. Complete Schedule 3 if you want to claim credits for education or childcare expenses.
• State tax return forms: Each state has its own rules for who must pay state taxes. State tax websites typically provide forms for residents, non-residents, and part-year residents.
• 1098-T: This form tells the IRS how much you paid in tuition and fees. Your school completes it and mails it to you or your parent. You need to include it when you file your taxes.
• 1098-E: If you paid any interest on student loans last year, your loan servicer should mail you this form. Include this with your tax filing to deduct interest payments from your taxes.
• 8863: Download and complete this form to see if you qualify for tax credits for college students.
• W-2: If you made $600 or more at work last year, your employer must provide you with a W-2. This form will show if you had any income tax withheld. Make sure you include it when you file your tax return.
• 1042-S: This form is similar to the 1040 form but for international students. Your employer will give you this form to report the income you earned. If your college awarded you certain stipends or travel grants, it would mail you this form.
• 8843: International students with zero U.S. income must complete this form and send it to the IRS to report that they earned no income in the country.

What are tax breaks for college students?

Even if you are a college student, you may still be expected to file a tax return depending on your income and whether your parents can claim you as a dependent. If you are a dependent on your parents' tax returns, you are generally not eligible to claim education credits—your parents may be eligible to claim these instead. However, there are still some tax breaks that you may be able to take advantage of as a college student.

The Tuition and Fees Deduction

The Tuition and Fees Deduction can lower your taxable income by up to $4,000.

The American Opportunity Tax Credit (AOTC)

The AOTC is worth up to $2,500 per year for an eligible college student. It is refundable up to $1,000, meaning that you can get money back from the credit if you do not owe any taxes. To be eligible, you must have received a Form 1098-T, Tuition Statement, from an eligible educational institution.

The Lifetime Learning Credit

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. Like the AOTC, you must have received a Form 1098-T to claim this credit.

Frequently asked questions