Tax Tips for Students

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The information in this article is up to date for tax year 2023 (returns filed in 2024).

If you’re a college student, you may not have filed taxes before. If this is you, don’t panic. Tax season can be intimidating, but we’re here to walk you through it. 

Below we break down what you need to know to file taxes as a student and give you pro tax tips for students that you can use to get the biggest refund you qualify for.

Do college students need to file taxes?

The first thing you need to determine is whether you are required to file taxes at all. The answer to this is: it depends. 

Your tax liability is based on your income. However, even if you don’t have to file a tax return, you may want to anyway if you’re eligible for a refund. 

You may get money back when you file taxes as a student if

• You qualify for a refundable tax credit
• Your employer withheld more taxes than you owe

Who needs to file taxes

You will need to file taxes as a student (single, dependent) for 2023 if  

• Your unearned income was more than $1,250.
• Your earned income was more than $13,850.
• Your gross income was more than the larger of:
  • $1,250, or
  • Your earned income (up to $13,450) plus $400.

Earned income: Earned income includes salaries, wages, tips, professional fees, and taxable scholarship and fellowship grants. Gross income: Gross income is the total of your unearned and earned income.

If your parents or guardians do not claim you as a dependent on their tax returns, you will still need to file taxes as a student (single) if your gross income was $13,850 in 2023.

If you are a married student under age 65 filing jointly, you will need to file a return if your gross income was more than $27,700. If you are filing separately, you each need to have earned at least $5 in 2023.

Are you a dependent?

Generally, parents can claim you as a dependent until you are 19 or, if you are a full-time student, until you are 24 years old. 

There are multiple tax credits and deductions available to students for education-related expenses (see below). However, if your parents claim you as a dependent, you may not be eligible to claim those tax breaks for yourself. (Your parents may be able to though!)

If you’re paying for your own schooling, talk to your parents before you file to determine your dependency status and make a plan for how you want to file. 

Tax credits for students

There are two tax credits specifically for students: 

• American Opportunity Tax Credit: This is a partially refundable tax credit worth up to $2,500 for students (or parents) who paid for tuition, books and other related expenses. You can only claim this credit during the first four years of college. If the credit reduces your tax bill to zero, you can receive 40% of the remaining credit refunded to you (up to $1,000).
  
• Lifetime Learning Credit: This credit is worth up to $2,000 for students who paid for tuition and other related expenses at a qualified institution. You are not required to be pursuing a degree to claim the credit. There is no limit to the number of years you can claim this credit.

Keep in mind, you cannot claim these tax credits if your parents list you as their dependent. You also cannot claim both credits in the same year—so choose the credit that will get you the best tax refund. 

Not sure which education tax credit to choose? ezTaxReturn can help! We take the guesswork out of taxes to help you claim the best options for your tax situation.

Scholarships, grants, and student tax deductions

Tax credits aren’t the only way to get a tax break as a student. 

Scholarships and federal grants are generally tax-free if they are put towards qualified education expenses. This means they won’t count as taxable income on your tax return–lowering your potential tax liability.

Additionally, if you have student loans, you can deduct your interest payments on your return for up to $2,500. (Just make sure you aren’t claimed as a dependent, or you won’t be able to take advantage of this deduction on your own return).

>>Learn more about how financial aid affects your taxes.

What tax forms do students need?

There are a few tax forms you may need when you file taxes as a student: 

• Tax Form 1040, U.S. Individual Income Tax Return: This is the standard tax return form most taxpayers use to file taxes. If you made student loan payments or wish to claim any education credits, you’ll also need to attach forms Schedule 1 and Schedule 3 when you file.
• Form 8863, Education Credits: Use this form to calculate and claim your education credits.
• Form 1098-E, Student Loan Interest Statement: If you paid interest on student loans, your loan servicer will complete this form and send it to you to include with your tax return when you file.
• Form 1098-T, Tuition Statement: This form reports your tuition payments to the IRS. Your school fills it out and sends it to you (or your parents) to include with your tax return when you file.

ezTaxReturn will walk you through all the steps to file taxes as a student and make sure you include all the appropriate tax forms when you file. Simple returns are free to file. 

File today!

The articles and content published on this blog are provided for informational purposes only. The information presented is not intended to be, and should not be taken as, legal, financial, or professional advice. Readers are advised to seek appropriate professional guidance and conduct their own due diligence before making any decisions based on the information provided.