Filing your first tax return

Deciding whether to file

Whether you must file depends on how much you earned, what kind of income it was, and whether someone else can claim you as a dependent. The IRS publishes those income limits every year in the instructions for Form 1040 and on its website. Your state may set its own rules for a state return.

Filing can make sense even when the rules leave it optional. If tax was withheld from your paychecks, a return is the only way to get any of it back. Campus jobs, work-study and summer roles can withhold more than a student ends up owing.

Gathering your papers

Collect every W-2 from the year, any Form 1099 for freelance or stipend income, and Form 1098-T from your school. The 1098-T reports what was paid toward tuition and required fees along with scholarships and grants, and it arrives early in the year. Keep your Social Security number and last year's return, if you filed one, close at hand.

Scholarships and grants spent on tuition, fees, books and required supplies are generally tax-free. Any part used for housing, meals or other living costs can count as taxable income. Your aid office can tell you how your awards were applied to your bill.

Dependents and education credits

If a parent can claim you as a dependent, you mark a box on your return that says so, even when they have yet to file. Talk with your family before anyone files, since a mismatch between the two returns can hold up both.

The American Opportunity Tax Credit and the Lifetime Learning Credit can lower the tax owed on education costs the IRS allows. Only the person who claims the student can take the credit, which for a dependent student is usually the parent. Each credit has its own income limits, set and published by the IRS.

Filing for free and keeping a copy

IRS Free File offers guided software at no cost to people under an income limit set each year, and many states run a version too. Volunteer Income Tax Assistance sites, known as VITA, prepare returns at no charge and often open on or near campuses during tax season. The federal deadline usually falls in mid-April, and the IRS announces the exact date each year.

Save a copy of your finished return both as a file and on paper. The FAFSA that opens the following October draws on the return you file this spring, and the next lesson shows how that link works.