By Colette Au
Since taxes aren’t due until April 15th, 2018, filing your 2017 fiscal year taxes might seem a long way away, but I’ve already started preparing for it. I’m in charge of USC Volunteer Income Tax Assistance (VITA), a student-run club that is part of a nation-wide IRS volunteering program. We provide free tax preparation services to low- and middle-income individuals and families, including international students and residents living in the neighborhood around USC. If you’re like most students, you probably haven’t needed to file your own tax return (or perhaps your parents did it for you). Although I’m not allowed to give tax advice because most advice is very situational, here are a few tips for students doing taxes for the first time:
- If you’re working an on-campus job this year, look out for a W-2
Form W-2 is a slip of paper that employers give you that lists your wages and any taxes withheld for the year. You’ll need this information to input on your tax return, so make sure you save it when it comes in the mail (usually in January or February). For students working on campus, you can elect to download a copy from Workday. If you work multiple jobs, you will have multiple W-2s. Note: if you’re self-employed (for example, doing some freelance work on the side), you’re still supposed to report income, even if the transactions are in cash.
- Keep track of your educational expenses
Did you know that it’s possible to lower your tax bill by deducting the cost of required textbooks? Make sure you save your receipts from the Bookstore, because you might be able to shave a couple hundred dollars off of your taxes if you owe anything. However, the tuition and fees deduction isn’t available for people that the IRS calls “non-resident aliens” (most international students). There are also education credits for people who are paying tuition out-of-pocket, and USC will send you a form called Form 1098-T so you can report that information on your tax return.
- There are different returns for residents and non-residents
If you’re an international student, don’t make the mistake of not checking if you’re a resident or not. Most international students are considered “non-resident aliens” because they are “exempt individuals” (IRS jargon) and have a different set of tax forms. The IRS uses a residency test to determine if you’re a resident for tax purposes, which you can read more about here.
- You might not have to file! But you need to check if you do
Generally, if you’re working an on-campus job, you are only required to file if you make more than a few thousand dollars. Even if you don’t need to file, you should consider filing a return in order to get a tax refund. The IRS has an article called Publication 501 about filing requirements here. If your employer deducts more taxes from your paychecks than you owe at the end of the year, you can get your money back!
- Take advantage of USC resources
If you don’t want to put in the time and effort to learn how to do your taxes on your own, save yourself the hassle. If you meet the income limits, you can get your taxes done by free by students! Most students working in the VITA program are accounting majors like me, and some of us actually enjoy learning about the American tax system.
In summary, filing your taxes in the U.S. can be very complicated. There are exceptions to almost every rule so you have to be careful and assess the facts of your own financial situation before you can correctly file your taxes. If you’re feeling lost in the tax system, it’s okay to ask for help. In fact, it’s better that you do because that last thing you want is the IRS coming after you for filing your taxes incorrectly.
Originally from Portland, Oregon, Colette is a junior in the Leventhal School of Accounting and Marshall School of Business. Born to immigrant parents from mainland China and Hong Kong, she is no stranger to bridging lingual and cultural gaps. As her high school offered an international boarding program, she made friends with classmates from all over the world. At USC, Colette participates in several service-oriented clubs on campus, including as president of Volunteer Income Tax Assistance (VITA) and an e-board member of Project 32 Tutoring. Singing, playing piano and guitar, and eating all kinds of foods (especially dessert) are some of her favorite hobbies. In summer 2018, she will be interning in San Jose at Deloitte, a public accounting firm.