college student/taxes question?

Question

I'm now a full time student in college.
I had heard before that you get a higher tax refund if you are? Kind of like when you're working, but underage?

Is it true?
and if it is,
I had a job this year, but i quit when i started going to school. would the refund only apply to the money i made WHILE attending college?

Answer 1

Nope, not true at all. What you can get by going to college is education credits, Hope Credit for the first 2 years in college, and Lifetime learning credit for any years after the first two. The thing is though, you can't be a dependent of someone else (basically, your parents), and also the credit is a "nonrefundable" credit, meaning that you have to have a tax liability to apply the credit against. If you don't have a tax liability then you have no credit.

Answer 2

Being underage does not automatically result in a higher tax refund.

If you are under 19 or are both under 24 and a full time student, then you often are a dependent of your parents. This reduces the number of exemptions you can claim on your W-4 and therefore increases the amount of withholdings. It also decreases the amount of the exemptions and standard deduction on your tax return. It may result in a higher or lower refund.

Tax returns are done on an annual basis. You report your total income for the tax year. It does not matter for federal income tax purposes whether the income was while you were a student or at a different time during the tax year. However, if you lived in a different state when you were a student and when you were not, then it does matter which state you lived in when you earned the money, but only for state tax purposes, not federal.

Answer 3

If you are claimed as a dependent, you will be ineligible for the rebate, but you may still benefit under the plan. While the rebate depends on your 2007 status and income, it is actually a rebate toward your 2008 taxes. According to the Economic Stimulus Act of 2008, taxes would be cut in 2008 from 10 percent to zero percent on the first $6,000 dollars of taxable income for individual taxpayers. So if you have taxable income in 2008, you will see a tax cut when you file in 2009.

Answer 4

Being a full time student, or being underage, doesn't change what tax you owe. You don't get a tax break for being a minor or being in school, except that you or your parents might be eligible for a tax credit for your tuition and fees.

Any refund is just returning an overpayment if you had too much withheld while you were working. It doesn't matter whether you were in school or not at that time.

Answer 5

Some good information so far, but:

If you are not a dependent you may be able to receive 1 of 2 credits OR a deduction from income (you can take whichever one works out better). If you qualify as a dependent, your parents may be able to take 1 of the 2 credits OR the deduction. IMPORTANT: This is one of the only times you can take yourself as a dependent even if you qualify as a dependent of your parents if the credit/deduction works out better that way. You must coordinate with your parents (obviously they can't take you as a dependent then). Learned of this at a CPA conference last year, also see bottom of page 13 at:
http://www.irs.gov/pub/irs-pdf/p970.pdf

Typically only tuition and fees qualifies (not housing or books), and there are income limitations.

Here's a chart that may help:
http://www4.nau.edu/bursar/irschart.htm
And a link to the official IRS publication:
http://www.irs.ustreas.gov/publications/p970/index.html

Also, if you cashed in savings bonds to pay for your education you may be able to exclude the interest from your income (but you can't do this AND take the credit/deduction, and only certain bonds are eligible).

Also, if you or your parents cashed in an individual retirement arrangement (IRA) to pay for your education there may be some breaks (but again you can't do this AND take the credit/deduction).

Answer 6

There's an automatic 3000.00 deduction when you are a full time student. Are you dependent on your parents? You'll get some kind of refund. Do you have children? Are you married? These are questions they ask. Check with the local H&R Block or your regular taxman. The government doesnt deduct books and I think some other items that were deductable. Hope it helps.