By Eileen Salazar
Uncle Sam sits back and waits to collect his money no later than Wednesday, April 15. Students who work and make more than $10,150 a year must file taxes. The American Opportunity Tax Credit and Lifetime Learning Credit can save students thousands.
There are two tax credits available for 2014 filings to help students offset costs of higher education by reducing the amount of income tax due.
“[The American Opportunity Tax Credit] is a tax credit of up to $2,500 of the cost of tuition, fees and course materials paid during the taxable year. Also, 40 percent of the credit, up to $1,000, is refundable. This means you can get it even if you owe no tax,” according to the Internal Revenue Service’s website.
The Lifetime Learning Credit is a credit of up to $2,000 for qualified education expenses paid for all eligible students. The Lifetime Learning Credit is a nonrefundable credit. This means that it can reduce tax to zero, but if the credit is more than tax owed the excess will not be refunded to the student, according to the IRS.
“A tax credit reduces the amount of income tax you may have to pay,” as stated on the IRS’s website. “Unlike a deduction, which reduces the amount of income subject to tax, a credit directly reduces the tax itself.”
Even though these tax credits are available for student, some don’t claim these benefits.
Laura Sida, current psychology major at CSN, states, “I wish I knew about taxes and tax credits. This way I would know my fullest benefits.”
Filing taxes is a multi-step process. Students can explore filing options through the IRS website or get the help of tax professionals. Forms that students might submit include the following: 1040, 1040A and 1040EZ.
Students need the 1098-T form. This is a Tuition Statement generated by eligible educational institutions— CSN—for each student they enroll and for whom a reportable transaction was made, such as qualified tuition and related expenses, according to the IRS.
Students can print this form by going to MyCSN: log in to personal account, click on pull-down menu called finances and click the 1098-T link. This form is needed as part of the filing process in order to qualify.
Current accounting professor at College of Southern Nevada Dr. Vicky Dominguez said, “If students are not informed of this form and the manner by which they can obtain this form, then, it defeats the purpose of assisting students in their educational needs.”
“As a business major I believe that it is important to know and file taxes,” said Ivan Gayosso-Ayala, CSN student. “Taxes are very important in everyone’s life at least here in the United States. They help pay for resources needed in the community.” Gayosso-Ayala plans to file taxes this year and gain benefits from the credits.
Coyote Student News at the College of Southern Nevada 