Tax filing may be less taxing than students think

By Thuba Nguyen
Arizona Daily Wildcat
Monday, April 12, 2004

When it comes to doing their taxes, many students defer the task to their parents, scared to tackle the process.

But for the average student at the UA, filing taxes by this year's April 15 deadline might not be so tedious and complicated, officials say.

Bill Moser, a graduate teaching associate in accounting, said doing taxes for an average, single student might not be so complicated. The process is quick, taking about less than a half-hour for single students without any dependents.

Moser said most students usually file the 1040EZ form, since they make less than $50,000, have no dependents and just claim themselves and their spouses.

Michael Flowers, an accountant at Flowers, Reiger and Associates, said students who make less than $7,800 per year will not have to pay the federal government any taxes. But if they do not file their taxes, they may not receive a tax return.

Students should file their taxes regardless of whether they owe money, Moser said, because their employers usually withhold more in taxes than what they must pay. By filing, they receive the money back, he said.

Moser said students who do owe money to the federal government can use the Hope Credit or Lifetime Learning Credit to reduce that amount.

The Hope Credit applies to students in their first two years of college. Students may use that credit toward qualified educational expenses, such as tuition and activity fees, but not books.

Students can also invoke the Lifetime Learning Credit after their first two years of college to decrease the taxes they owe the government if they make more than $7,800.

With the Lifetime Learning Credit, a student who pays up to $10,000 per year for educational expenses may receive a 20 percent tax credit. For instance, if a student pays $5,000 in tuition, a qualified educational expense, the student's tax credit is $1,000. The student may subtract that amount from the total tax owed to the government, paying less in turn.

Flowers said a lot of people make the mistake of not using the right Social Security number or not having enough postage stamps on their envelopes, which may delay their tax return.

Matt Cranswick, a chemistry graduate student who filed his taxes two weeks ago at H&R Block, said students should also get their taxes done before the April 15 deadline.

"If you found out you owe money, you better hope that you have money," Cranswick said.

Cranswick said he ended up finding out he owed money after filing his taxes late one year, so he had to scramble and gather enough money to pay his taxes.

For students who procrastinate or forget to file their taxes by April 15, Flowers said they may file an extension, which would automatically postpone their due date to Aug. 15. That way, they will avoid the 5 percent per month charge for failure to file.

Flowers said if students have questions they should go to the Internal Revenue Service Web site for answers or the downtown IRS office, 300 W. Congress St.