Guide to filing taxes as a college student

Do I need to file my taxes as a college student?

Whether you’re a student or working full-time (or both), everyone must file a federal tax return if they make over a certain amount of income. The IRS will use income from all streams to land on your annual gross income.

You’ll need to know your:

• Earned income. This includes salaries, wages, tips, professional fees, and other amounts received as pay for work performed.
• Unearned income. This is investment-type income and includes interest, dividends and capital gains, rents, royalties, etc. Distributions of interest, dividends, capital gains, and other unearned income from a trust are also unearned income to a beneficiary of the trust.

Your filing status is also important in figuring out if you must file your taxes. In 2023, single students under 65 needed to file taxes if their gross income was at least $12,950. Married couples can file jointly or separately. There are different income thresholds in either case. Married couples under 65, filing jointly, must file taxes if their combined income reaches $25,900. If you are married and file separately, you and your spouse generally need to file taxes if you made $12,950 or more.

Choosing the right tax filing status as a college student

The IRS has five filing status options for taxpayers required to file income taxes. You can file as:

• Single;
• Married, filing jointly;
• Married, filing separately;
• Head of household, or;
• Qualifying surviving spouse.

Your filing status determines your standard deduction, your tax rate and the credits you are eligible for, and their phase-out ranges. All this is important because it affects how much you pay—and get back in the form of a refund.

It’s also important to understand your current tax filing status, so that you can properly fill out an IRS Form W-4. This is the standard tax form used by employers to know how much federal tax to take out from your paycheck to cover your taxes.

A Tax Pro can help you with choosing the right filing status. Choosing correctly can save you big dollars at tax time but choosing the wrong one can cost you.

Are you being claimed as a dependent?

One of the first things you’ll have to find out is whether you are being claimed as a dependent. You’ll have to speak with your parents (or any guardians you may have) to find out if anyone is claiming you as a dependent. If they are, it affects some of the credits and/or deductions that you may claim on your own return.

Generally, a parent can claim you as a dependent until age 19, but if you are a full-time student, they can claim you as a dependent until age 24. There are other determinants, including how much support you provide for yourself, or your parents provide for you. If your parents do qualify to claim you as a dependent, the IRS considers you a dependent whether your parents claim you or not.

Even if a parent or guardian claims you as a dependent, you will still have to file a return if your gross income is over the annual threshold. You can always work with a Tax Pro to sort out what the best way ahead may be for you.

What documents will I need to file taxes as a college student?

Here are some of the key documents you’ll need to file your taxes:

• IRS Form 1040: This is the basic income-reporting form that almost everyone uses. You might have to complete multiple add-ons called schedules. You should complete Schedule 1 if you made student loan payments. Complete Schedule 3 if you want to claim credits for education or childcare expenses.
• State tax return forms: States have their own rules for who must pay state taxes. State tax websites typically have forms for residents, nonresidents, and part-year residents.
• Form 1098-T: This form tells the IRS how much you paid in tuition and fees. Your school completes it and mails it to you or a parent. You need to include it when you file your taxes.
• Form 1098-E: The exemption on student loan payments and no interest expires August 31, 2023. You may have paid interest on your student loans last year. If so, your loan servicer should mail you this form. Add the interest paid amount to adjustment to income section of your tax return and lower your taxable income and income taxes. Form W-2: If you made $600 or more at work last year, your employer must provide you with a W-2. They must send these out by late January every year. This form will show if you had any income tax withheld. Make sure you include it when you file your tax return and bring any W-2s to your appointment with your Jackson Hewitt Tax Pro.
• Any Forms 1099-NEC or 1099-K from your self-employment or side gig. These should also be mailed to you by late January every year.
• If you didn’t receive any 1099s from your self-employment or side gig, make sure you have a record of all the income paid for the year.

You may need other documents, so work with your local Jackson Hewitt Tax Pro. We also offer a customized tax document checklist to ensure you know exactly what you need when preparing to file your taxes.

Is Form 1098-T important?

Yes, this is one of the most critical pieces of information you’ll need to file your taxes. As a student, you should receive a Form 1098-T, or Tuition Statement, which reports the amount of tuition and required fees you or your parents paid to attend school. The form includes any scholarships or grants received, whether the student is a part-time or graduate student.

If the IRS asks you to prove education expenses, you may need more than the 1098-T issued by your college or university. Receipts from the school showing the amounts paid for tuition and fees can help with verification. Canceled checks or bank statements are also good records. If payments included amounts for charges other than tuition and fees, you should save a copy of billing documents from the school that break down individual charges.

If you don’t receive the 1098-T or it’s incorrect, get in touch with your school to get your form, or have it corrected.

Education tax credits for 2023

There are various education credits and deductions you may be able to take advantage of as a college student. Below, we discuss the two education credits, but there are many other deductions to consider with a Jackson Hewitt Tax Pro.

American Opportunity Credit

The American Opportunity Credit (AOC) allows for a maximum credit of up to $2,500 for the cost of tuition, fees, and course materials paid during the year. Additionally, up to 40% of the credit may be refundable, meaning you could get up to $1,000 added to your tax return. The AOC is available to you if you’re enrolled at least half-time at a post-secondary institution.

The credit is only available if the student has not completed the first four years of postsecondary education before the beginning of the tax year. Therefore, it is generally not available for graduate students.

Since the credit is available for taxpayers, their spouse, and any dependents in college or trade school, if your parents claim you as a dependent, they can claim this credit.

Additionally, there is a phaseout for the credit that begins at $80,000 ($160,000 if filing married, filing jointly) of adjusted gross income. So, if your parents are high earners, they may not receive the full benefit of the credit.

This is one issue and there are many others, so work with a Tax Pro on what may be right for you and your family.

Lifetime Learning Credit

The Lifetime Learning Credit of $2,000 is available for qualifying education expenses (QEEs) paid for an eligible student. For the lifetime learning credit, you’re an eligible student if enrolled in one or more courses at an eligible educational institution. The expenses must be for an academic period that begins during the tax year or during the first three months of the following tax year.

There are fewer requirements for the Lifetime Learning Credit. For example, you do not have to be enrolled at least half-time, and the Lifetime Learning Credit can be claimed for more than four years. Additionally, the taxpayer may not claim the Lifetime Learning Credit if they are already claiming the American Opportunity Credit.

What is the difference between a tax credit and tax deduction?

Both tax credits and tax deductions can lower the amount of taxes you pay for the year. A tax deduction will reduce your taxable income, while a tax credit will reduce your taxes or add to your refund, dollar for dollar. That means you’ll owe less, or even better, get a bigger refund. A Tax Pro can help with what credits will make sense for you.

Knowing what credits and deductions you are eligible for will help when gathering the proper documentation needed to prepare and file your taxes.

Itemized versus standard deductions

A standard deduction is a specific dollar amount that reduces the amount of income on which you’re taxed. The standard deduction amount depends on your filing status and whether you’re 65 or older, are blind, and whether another taxpayer can claim you as a dependent. On the other hand, itemized deductions are certain expenses the IRS allows you to deduct from your income to figure out your true taxable income. The more you can itemize, the lower your taxes for the year will be. You could even get a bigger refund.

There are specific circumstances and limits when itemizing deductions. Possible itemized deductions include medical expenses, certain taxes, mortgage interest, charitable contributions, casualty loss in a federally declared disaster area, as well as other miscellaneous deductions.

If you are self-employed, you can claim your self-employment expenses, like your home office, which will reduce your taxable income.

Since every taxpayer is different, a Tax Pro can help you with deciding whether to itemize or take the standard deduction. But the general rule is easy—you get to pick the bigger deduction of the two: Either the standard deduction that all taxpayers are entitled to, or itemized deductions, if larger.

Taxes can be difficult to understand as a college student, and we know you may have questions. We can help make the process of filing your taxes easy and as stress-free as possible. Find a local Jackson Hewitt Tax Pro near you today.  

About the Author

Mark Steber is Senior Vice President and Chief Tax Information Officer for Jackson Hewitt. With over 30 years of experience, he oversees tax service delivery, quality assurance and tax law adherence. Mark is Jackson Hewitt’s national spokesperson and liaison to the Internal Revenue Service and other government authorities. He is a Certified Public Accountant (CPA), holds registrations in Alabama and Georgia, and is an expert on consumer income taxes including electronic tax and tax data protection.

More about Mark Steber Our Editorial Policy