Serving the campus of the University of Alabama since 1894

The Crimson White


Serving the campus of the University of Alabama since 1894

The Crimson White

Serving the campus of the University of Alabama since 1894

The Crimson White

Students find aid as tax day looms

Do not be alarmed by students running with stacks of paperwork, sighing apprehensively or carrying several No. 2 pencils. With only six days until the deadline to file taxes, students should keep a few things in mind as they hurry to round up their tax returns.

Dan Boone, a spokesman with the Internal Revenue Service for Alabama and Tennessee, said filers have access to a number of handy tools on the IRS website, including the web-based Free File program.

“Anybody with income under $58,000 can do their own taxes using the software online for free,” Boone said. “The tax software is very intuitive, especially if you’re a person who does your banking or shopping online, which a lot of people do nowadays.”

He recommended Free File for students who have W-2 income from a job and relatively uncomplicated tax information, such as a small amount of bank interest. Other resources include the fairly new IRS2Go mobile app for iPhone and Android devices and the Data Retrieval Tool, which allow students to request their tax return records when applying for financial aid.

Boone said some of the IRS software contains a chat feature, where filers who have technical issues can ask questions and interact with representatives from the software company itself. Additionally, the Interactive Tax Assistant tool answers questions regarding tax law by guiding users through a quick interview process.

(See also “Raise tax revenue, reduce debt by cutting taxes“)

According to a recent press release from the IRS, a greater number of people are showing an interest in filing their taxes online. The organization expects a seven-percent decrease this year in paper filing.

“The IRS website is a very good resource,” Boone said. “One interesting thing is that the last time we pulled the statistics, 91 percent of all returns nationwide had been filed electronically. Very few people do paper tax returns anymore because the software is so easy to use, and for most people, it’s free.”

Students in particular should coordinate with their parents, who may claim them as dependents. They should also keep in mind several potential education benefits and deductions such as the American Opportunity Tax Credit, which applies to undergraduate students, and the Lifetime Learning Credit for graduate students.

The IRS maintains offices in cities throughout Alabama, including Tuscaloosa and Birmingham, where people can file their taxes for free. In order to qualify for this service, participants must make under $52,000 per year, which applies to most students, Boone said.

“You can also search for free help sites, either using the app or our website,” he added. “As good as tax software is nowadays, most people find that they don’t need a preparer, especially if their return is fairly simple.”

The local nonprofit organization Impact Alabama also offers free tax preparation through its SaveFirst initiative. The program targets working families and individuals in the low-income bracket, whose tax returns are prepared by trained college, graduate and law students. This year, Impact Alabama implemented three SaveFirst sites in Birmingham and two in Tuscaloosa.

(See also “Classes provide insight on managing personal finances“)

Delisa Baldwin, a junior majoring in accounting at The University of Alabama, volunteered at SaveFirst in 2013 and again this year.

“I’ve seen a good amount of students, being that it is a free tax service,” Baldwin said. “Students usually don’t make a great amount of money anyway, so when they do their taxes, they only get back what the federal government has taken out. They can’t afford to pay for tax services elsewhere.”

Filing taxes often makes students nervous, she said. Those who don’t know much about tax laws sometimes think they owe money to the government, when in actuality they may get a refund. Students who use SaveFirst are comforted by receiving assistance from someone in person.

“A lot of people don’t understand tax lingo,” Baldwin said. “I think that with anything [you are] unfamiliar with, when you have someone who’s there and trained to help you, it calms your nerves.”

Baldwin said many students wait until the last minute to file their taxes because they are either afraid or don’t know where to go to file them. As a result, they file after the deadline or sometimes not at all. Shane Stinson, an assistant professor in Culverhouse School of Accountancy, said filers often make mistakes during this last-minute rush.

Students may not have to file a tax return if they earn below a certain threshold of income, an attractive option for those who are anxious about filing, Stinson said. According to the IRS website, most people younger than 65 who have a gross income less than $10,000 are not required to file a return.

“The flip side of that is if they’re working part time, and an employer is already taking taxes out of their pay and sending it to the government,” he said. “If they don’t file a return, then they’ll never get any kind of refund back. They leave money on the table.”

Students who are dependents or do not have a job may also consider not filing at all. However, filing a tax return is almost always to a student’s benefit, he said. Stinson added that, even when working with a tax professional, the individual filer is ultimately responsible for any information submitted to the IRS.

“You tend to hear horror stories about IRS audits and things like that, and there’s a legal aura about [filing taxes] that can give people a lot of fear,” Stinson said. “As long as you’re making the effort to do the right thing and to be accurate in your reporting, it’s not such a bad thing.”

(See also “Financial planning classes should be required at UA“)

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