If you’re a full-time student, a tax form is probably not high on your list of priorities. After all, you’re going to school and earning little or no income. Whether or not you’ll receive a tax refund and what the amount may be depends on a variety of factors.
TL;DR (Too Long; Didn't Read)
Student tax credits may allow you to receive money back when you file your taxes.
Student Tax Return Tutorial
The IRS has a tutorial available that allows you to figure out the educational credits and deductions for which you qualify. If you do qualify for these credits and deductions, you will likely receive more money back after filing your taxes. To take the tutorial, you must have your filing status, enrollment status and adjusted gross income. You must also have a record of your expenses, who paid them and the particular academic semesters involved. Only U.S. citizens or resident aliens are eligible for these credits and deductions. If married, the spouse must also be a U.S. citizen or resident alien. You must also have a record of whether any of these educational expenses were paid for with tax-exempt funds. You can’t receive a credit or deduction for expenses paid for with tax-exempt monies. The entire tutorial takes about 10 minutes to complete, and when finished, you’ll know whether IRS full-time student status garners you more money when filing income tax.
Filing Tax Returns as a Full-Time Student
Your status as a full-time student doesn’t exempt you from federal income taxes, but it also means you may not have to file a federal tax return. You must earn a minimum amount to file taxes, which in 2017 was $10,400 if filing singly. For 2018, the minimum rises to $11,950. If you’re claimed as a dependent on a parent’s income tax return, you must file a tax return if you had at least $1,050 in unearned income and $12,000 in earned income for 2018. For 2017, unearned income was taxed at the parent’s rate, and a dependent has to file a tax return if he earned $6,000 or more.
Even if you don’t have to file a return, it may prove worthwhile. The American Opportunity Tax Credit provides a refundable credit of up to $2,500 when you pay for certain educational expenses, including tuition and books. You may receive money back from the AOTC even if you aren’t expecting an income tax refund. The Earned Income Tax Credit is another credit for which you may qualify if your income is relatively low.
Student Tax Credit 2018
The Tax Cuts and Jobs Act, signed into law by President Donald J. Trump on December 22, 2017, does not make a lot of changes regarding college tax credit, but it does make some. For the 2018-2025 tax years, the tuition and fees deduction is unavailable. The business deduction for work-related education, which allowed employees to deduct work-related education expenses if they itemized, is also gone.
Student Tax Credit 2017
The tuition and fees deduction is still available for the 2017 tax year, as is the business deduction for work-related education expenses. However, you can’t qualify for the former if you are claimed as a dependent on your parent’s return or if your filing status is married filing separately. You can’t claim the Lifetime Learning Credit or the American Opportunity Tax Credit in a year you take the tuition and fees deduction. You won’t qualify for the tuition and fees deduction for expenses paid with grants, tax-free scholarships, fellowships and the like or if the funds came from a Coverdell education account, tax-free savings bonds or from your employer.
- IRS: W 4 Allowances, Excess FICA, Students, Withholding
- IRS: Topic Number 457 – Tuition and Fees Deduction
- IRS: Am I Eligible to Claim an Education Credit?
- IRS: American Opportunity Tax Credit
- Next Level Accounting & Tax: TCJA Changes to Education
- Nolo: When Does Your Child Have to File a Tax Return?
A graduate of New York University, Jane Meggitt's work has appeared in dozens of publications, including PocketSense, Zack's, Financial Advisor, nj.com, LegalZoom and The Nest.