Tax tips for university students
Kinesiology junior David Chinn lives on his own, but his parents still include him on their income tax returns.
“So even though I don’t live with my parents, because they help pay 50 percent of my rent, they claim me on their taxes,” Chinn said.
Students should check with their parents before filing their own taxes.
“By tax law, if someone claims you then you cannot claim yourself,” said Dr. Chin-Yen Alice Liu, assistant professor in the College of Business.
The deadline for filing taxes is April 17, and Liu offered several tips for students.
Regardless of who claims the student, they will need the 1040 tax form and the 1098-T, Tuition Statement, from their school, Liu said. The 1098-E, Student Loan Interest Statement, is for those who received student loan interest of $600 or more, according to IRS.gov.
“When the parents claim you as a dependent, you have to make sure that the parents have all of the documents they need,” Liu said.
Students also can claim two education-related credits on their 2017 income tax return: the Lifetime Learning Credit and the American Opportunity Tax Credit. Liu said the credits have been around for at least eight years.
“They have been available for a while,” she said. “I have been volunteering for eight years, and they are available since then.”
The Lifetime Learning Credit (LLC) is for tuition and other school expenses for undergraduate, graduate and professional degree courses or courses taken to improve job skills. One has to be enrolled or taking courses at an eligible educational institution, taking higher education courses or courses to get a degree.
To claim the LLC, the student, taxpayer or third party must pay qualified higher-education expenses for a student enrolled at an eligible school, according to IRS.gov. The eligible student must be the taxpayer, spouse or a dependent.
Students have an unlimited number of years to claim this credit, which is worth up to $2,000.
The American Opportunity Tax Credit (AOTC) is for educational expenses such as textbooks and other required supplies. Students could get an annual credit of $2,500. The student is paid this for the first four years of higher education.
To be eligible for the AOTC, the student must:
- Be earning a degree or other legitimate education credential.
- Be enrolled at least part time for at least one academic period starting in the tax year.
- Not have finished the first four years of higher education at the start of the tax year.
- Not have claimed the AOTC or the former Hope credit for more than four tax years.
- Not have a felony drug conviction at the end of the tax year.
Both the American Opportunity Credit and the Lifetime Learning Credit are in the 1040 form.
Everyone has extra time to file their taxes this year. The deadline is Tuesday, April 17. Normally April 15 is the deadline. But that day falls on a Sunday this year, and Monday, April 16, is Emancipation Day, a legal holiday in the District of Columbia.
Palo Alto College, 1400 W. Villaret Blvd., offers free assistance with tax returns through April 17 for those with an annual household income of $60,000 or less. The hours are 1-7 p.m. Monday and Wednesday, 10 a.m.-4 p.m.Tuesday and Thursday and 9 a.m.-3 p.m. Saturday in portable 1, room 801-802. Representatives of Volunteer Income Tax Assistance provide the service. For more information, visit http://alamo.edu/pac/vita/.
For more information on the Lifetime Education Credit, visit https://www.irs.gov/credits-deductions/individuals/llc
For more information on the American Opportunity Tax Credit, visit https://www.irs.gov/credits-deductions/individuals/aotc