Students should file taxes early to avoid problems

Although the Internal Revenue Service's tax return filing deadline is not until April 15, students should start thinking about completing their tax forms soon.

Cyndi Vines, University of Arizona assistant professor of accounting, said students can use a number of tips in order to avoid tax problems.

"Scholarship income is taxable to the extent the scholarship exceeds the amount spent on tuition, books, fees and supplies," Vines said. "In other words, any scholarship money spent on room and board is fully taxable."

She said graduate teaching and research assistants should report income received for their services, although the money distributed may be defined as a scholarship.

Students should also know whether or not they are claimed as a dependent on their parents' tax return, Vines said.

"A student that is declared as a dependent on his parents' tax return cannot take a personal exemption, because it is taken on the parents' return," Vines said.

Mark Tingstad, tax department manager at Deloitte and Touche in Phoenix, said students can minimize their taxes and avoid problems with the IRS by being honest on their W-2 and 1040EZ forms.

"Just hit (the forms) on the nose as best you can," Tingstad said. "If you report income, follow the rules and don't try to hide anything, there shouldn't be any problems."

He said people can easily avoid the biggest filing mistakes.

"It's not rocket science," Tingstad said. "Just don't miss deadlines and read the instructions."

Students can receive a tax deduction when they get a job and leave Tucson as long as they move 50 miles away from the city, Vines said.

"The moving expenses may be deductible," she said. "You must work at the new place of employment for at least 39 weeks in the 12-month period following the move (if you are not self-employed)."

She said sometimes students forget to file their taxes or do not realize they have to file a tax return.

"A taxpayer must file a tax return when the gross income exceeds his personal exemption amount ($2,500 or $0 if claimed on someone else's return)," Vines said.

She said avoiding problems with the IRS is easy so long as taxes are filed on a regular basis.

"File consistently," Vines said. "One year you may have income you must report followed by a year with little taxable income. It is easier to file a return to show that you had little or no income than it is to respond to an IRS inquiry about why you didn 't file."