By Kayleen Bengtson, Business Manager
This week officially marks the first week in February. Winter is coming to an end, Valentine’s Day is upon us and (most excitingly) tax season is right around the corner.
To the vast majority of us, tax season seems like a daunting task. When it comes time to complete your tax form (whether you opt to file on your own or you pay a professional tax service), you will most likely find yourself overwhelmed by fancy accounting terms and tax jargon. After taking Federal Income Tax Accounting (yes, that’s a real course) last year and researching countless websites and blogs I have compiled a few tips for each of you ready to embark on tax season. Without further ado, here are a few tips that can help you save some cash come April:
Tax filing tips:
1. Hit your deadlines
For those of you starting from Ground Zero “Tax Day” is April 18, 2016. The penalties for filing taxes late are insane and you can easily find yourself ramping up an overwhelming tax bill from your friendly neighbor, the IRS.
2. Organize your things
Within the next few weeks you should be compiling a few key pieces of information that will likely assist you when filing your taxes. Such things may include the following: charitable contributions (tithing to churches, donations to non-profits), stock/bond information (if you own stock or have bonds in your name), tax information from employment, and/or scholarship/FASFA information. Be sure to keep track of all these things like the responsible college student you are.
3. Investigate your benefits
There are countless deductions (reductions in your taxable income), exemptions (reductions in your tax obligation), and credits (reductions in the amount of tax you pay) available for you.
4. Tip: if you have a choice between a deduction and a credit…
take the credit because it’s generally worth more. Many deductions are available for “degree-seeking university students”, which applies to all of us – yay for saving money. I highly encourage you all to investigate this information at https://www.irs.gov/uac/Tax-Benefits-for-Education:-Information-Center and http://taxhelp.org/resources/student/.
5. File your way
There are a few ways in which you can file your taxes to the IRS:
- Send your tax information to your parents and have them take care of it for you. Keep in mind, however, that even though your parents may take care of your taxes, there are usually fees involved. I admit that I did this in my late high school and early college years.
- Pay a professional tax service. There are countless tax attorneys in the Lexington Bluegrass area. You could also check out places like Walmart or Sam’s Club; two years ago I filed my taxes through Jackson Hewitt at one of their booths in Walmart. This usually costs around $40 in professional fees, however you may be able to receive more tax reimbursement than filing yourself.
- Download online software or use TurboTax. This is becoming an increasingly popular alternative in recent years. The do-it-yourself method usually costs around $10, which makes it extremely appealing to college students whose taxes are fairly simple to file. Although I have never personally used TurboTax I have heard great things about it – easy to use, minimal time, and cost efficient.
- There is also tax information passed out in the Caf lobby each year – take advantage of this!
Information you will need when filing:
- Social security number
- Copy of last year’s tax return (ask your parents if you do not possess this information).
- Bank account and routing number (if you choose to deposit your refund directly into your account)
Here’s the deal: most of us do not enjoy the daunting task of filing taxes each year. Our society groans at the thought of someone taking his or her money away from them. On the contrary, we as Christians must recognize that what we consider “our money” isn’t really our money whatsoever. We must embrace the truth that God is the ultimate owner of all and we are simply his stewards. If we steward our finances by giving generously, saving responsibly and spending wisely our perspective of tax season will begin to shift.