To file tax or not (student)

Paying for College
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<p>With tax season approaching, I am a bit confused whether I should file my own tax or not (I made ~4.5k from a spring internship & ~4k in work-study). My current EFC is 0 (btw).</p>

<p>I've searched around and it says that if you start filing your own taxes, you'll become an independent on FAFSA and your parents can't claim you as an dependent anymore. Would this adversely affect my FAFSA? I'm still a bit confused about tax filings... Since FAFSA gives the student the option to not file their earnings, what is the best route to take? I am fine with either option.</p>

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<p>

No! You won’t become independent if you file your own taxes.

I think you’re required to file taxes on your own. See [Publication</a> 501 (2013), Exemptions, Standard Deduction, and Filing Information](<a href=“http://www.irs.gov/publications/p501/ar02.html#en_US_2013_publink1000220702]Publication”>http://www.irs.gov/publications/p501/ar02.html#en_US_2013_publink1000220702)

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<p>It appears that you may owe taxes, and in any event you need to file them with earned income of more than $6100. That has nothing to do with FAFSA dependency criteria nor does the work study income count on FAFSA, though your internship income will. It’s still below what will affect your financial aid, I believe.</p>

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<p>Gotcha, I’ll file my own taxes then. To clarify, filing my own taxes won’t affect my dependent status for my FAFSA and parents at all? That would be a relief…</p>

<p>For filing purposes, is there any particular tax form I should file my 2012-2013 income on? Thank you so much for the all advice so far, 4kidsdad and cptofthehouse!</p>

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<p>

You need to separate your incomes by calendar year.</p>

<p>You report your 2012 incomes on the 2012 1040, 1040A, or 1040EZ.</p>

<p>You report your 2013 incomes on the 2013 1040, 1040A, or 1040EZ.</p>

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<p>You will not be filing 2012-2013 income…you will be filing 2013 income on the 2013 IRS income tax form. If you don’t have anything more complicated than your income from your jobs, you should be able to do a 1040 EZ. If your income is below a certain amount, you can free file your federal income taxes, and in some states, your state taxes. Go to IRS.gov and look there.</p>

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<p>Yes, a confusing part about college scholarship and financial aid awards, and filing taxes is that the awards tend to be awarded on school years that encompass two calender years. For example the grants you are awarded for the 2013-14 school year are for the semester starting fall of 2013 to year end. You usually actually “GET” half that award for that first semester and the bursars office just scoops up half the year’s tuition and other cost out of what gets awarded, billing you for the rest or sending you a check or leaving a credit if there is more than the direct billed amounts for the term. Usually in January,you get the second half of the asward.</p>

<p>For taxes, all you report for 2013 is that Fall semester amount that got credited to your college account or actual checks you received if you go the money that way. It’s the money you actually got in 2013 that you report. And you offset it with tuition and fees that were actually charged for the fall semester, and books and supplies actually purchased in 2013. </p>

<p>FOr 2014 you will report the other half of the award and half of what you get for the next school year. Confusing, isn’t it? Just keep in mind that taxes are done in a calender year and you only report what you actually get, not the promise of what you will get, and you only deduct what you actually pay, not what you owe or will owe. You could drop dead or out before next term, you know or transfer elsewhere and forfeit the second term scholarship. These things do happen, so you only use what you actually get and offset it against what you actually pay.</p>

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<p>God, this is confusing. Will read and try to absorb everything. Will ask more questions if I have any! Thanks all for the help! :)</p>

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<p>There is a box on the 1040EZ that you will check that says you can be claimed as a dependent on someone else’s return. Then your parents can continue to claim you if they are entitled to.</p>

<p>CPT discussed taxable scholarships and grants which you didn’t give any indication was the case. That would only apply if the total of scholarships and grants you received in 2013 was more than the total of tuition, mandatory fees and the cost of required books and supplies(note this doesn’t include room and board) in 2013.</p>

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<p>Did you get a $4K work study award for the 2013-14 school year and work half the allocation or did you actually earn $4K in workstudy in 2013? That makes a big difference. Your internship money, you actually received in 2013 and you should get a w-2 for that. The w-2 for workstudy will have the figure you actually earned in 2013, not the award you got notice of in 2013, necessarily, unless you actually did get $4k in workstudy earning this CALENDER year 2013. </p>

<p>With a zero EFC, you would have also gotten PELL grants, if you got the max, half was likely deposited into your account. You take all of the money you actually got in grants, scholarships and earnings. You take the tution, fees, books, required supplies actually paid in 2013 and subtract them from the grants and scholarships to get the amount that is reportable and subject to tax. Note that “subject to tax” does not mean you will be taxed. You have to have a big enough total income number to actually owe a tax on them. </p>

<p>I am assuming that you went to school only for the fall semester. If you have tuition, fees,and other costs for summer or the spring of 2013 that comes into the picture too, along with any payments you actually got in grants/scholarships. </p>

<p>You go on what you actually got, not what was awarded by letter, and what you actually paid, not what was billed.</p>

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<p>A lot of students and parents are asking tax advice on this forum, and I want to just throw out there that this is not the place to get it even with some pros on the board. I say this because there are too many times that far too little info is given for even close to an accurate appraissel and advice can be given.</p>

<p>I suspect that you have been a student all year, OP, and so your awards in terms of financial aid , what is billed, etc may encompass 2012 as well as 2013 and 2014. It can get confusing yes. When I first read your post, I thought you were a first year student, but you are not.</p>

<p>You need to separate out what was actually given to you (grants, scholarships) in each calender year, and what you paid in tution, room, board, etc each calender year, and what you earned each calender year. Regardless of what the actual outcomes are, you need to sit down with a professional and get a handle on all of this.</p>

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<p>

Or get help from IRS See [Free</a> Tax Return Preparation for You by Volunteers](<a href=“http://www.irs.gov/Individuals/Free-Tax-Return-Preparation-for-You-by-Volunteers]Free”>http://www.irs.gov/Individuals/Free-Tax-Return-Preparation-for-You-by-Volunteers)

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<p>^Yes, one year our S mistakenly filed as not our dependent, and got his tax form in first, (using Turbotax) which caused the system to spit OURS out when we filed claiming him. IIRC we had to refile manually (couldn’t just amend the return online). That was annoying!</p>

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<p>The long and the short if that you will have to file a tax return. </p>

<p>With a zero EFC, chances are that your financial aid was greater than your allowable academic deductions. In plainer words, you might have income from your SCHOLARSHIPS if they exceed your tuition and fees. </p>

<p>The internship will have its own set of problems, especially if the payments were reported on a 1099. If you did not pay SS taxes, you are looking at a bit over 15 percent of those earnings. Not income taxes but self-emplyment taxes. Luckily enough, the work study is exempt from FICA and SS taxes. A bit of a break here. </p>

<p>If your parents claim you as a dependent (and you do not pay 50 percent of your net expenses) your deductions will be smaller as you cannot claim the exemption. This means that you might have to pay some taxes on both the financial aid and your earnings. Fwiw, you might become independent for FAFSA, but that is well beyond the scope of this forum. </p>

<p>Lastly, your internship might also change your student contribution and increase YOUR EFC for next year. </p>

<p>As it stand, tt’s just one of the most egregious use of the tax system that a student with a very low EFC had to deal with taxes while trying to help with his expenses by working. Our politicians should be ashamed. But that is another story!</p>

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<p>My D made only a few hundreds last year but she still file the tax return so that she can get the tax refund.</p>

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<p>OP, how much grant money did you actually receive in 2013? Doesn’t matter when the award was made, but when the money actually go into your bursar’s account or be given to you by check is what counts,in this calendar year. That is, how much scholarship and grant, including Pell, private scholarships, School scholarships, not loans, not work study money? </p>

<p>How much did you earn all year at all of your jobs? Hopefully, you get a W-2 and SS was taken out of your internship. Not how much WS was awarded, but how much did you make? In 2013.</p>

<p>How much tution and fees did your college charge? All colleges you attended in 2013? HOw much did you pay out with your financial aid, doesn’t matter what, but how much did you pay the college for tuiton, fees? Then how much did you spend on required text books and supplies in 2023? </p>

<p>YOu can subtract what you paid in those eligible expenses from your grant amounts, and that will give you the amount of scholarship that is considered for tax purposes. You then add up what you earned in 2013 for earned income. </p>

<p>How this works with your parents claiming you as a dependent and who gets the college credit/deduction is something to discuss with a tax consultant. You can get an appt with the IRS and go over all of this or you can look for some private organization that does this as a service. </p>

<p>If you do owe taxes, I agree with Xiggi. It is beyond me how with half the country not paying taxes that some people, like my own mother, are very low income still have to pay. I want to spit each time I do her returns. Doesn’t make enough to live anywhere decent, has high medical, prescription, dental, other needs, but still owes taxes. Hopefully, if you owe anything, it will be a small amount.</p>

<p>I want to add that the internship at $4k is unlikely to affect the EFC as there is an allowance there, and work study and grant money will NOT be included on FAFSA. And any taxes owed will reduce the $4K further. What’s scary is that if the OP did work non work study, as some kids in this situation may do and earn over the allowance, it would reduce the financial aid for the subsequent year, which makes no sense for someone from a zero EFC household.</p>

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<p>Everyone should submit a return to the IRS! Last year when I had to file for the first time I was in shock… Didn’t know what to do at all, so I went online to some website and filled my return through there. I got a refund… so I guess everything was okay. I think I will use it this year again, I’m still not quite sure what to do…</p>

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<p>The IRS web site has links to some free file programs. That is a good choice for people with simple returns. You can’t actually file this year until January 31st at the earliest.</p>

<p>[Free</a> File: Do Your Federal Taxes for Free](<a href=“http://www.irs.gov/uac/Free-File:-Do-Your-Federal-Taxes-for-Free]Free”>Free File: Do your Federal Taxes for Free | Internal Revenue Service)</p>

<p>Even if filing is not required, you should do so to get a refund if you had taxes deducted. Of course you have to file a return if income is over the required filing cut off.</p>

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<p>If your family uses TurboTax or something similar, you may be able to use the same program for your filing.</p>

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<p>But I am a non-resident…</p>