POSTED ON MARCH 23, 2011:
Uncle Sam gives a little more back to students
With the collapsed economy, there are more stresses on students as they wear more hats than ever; working more hours for less pay, finding a way to pay for school and taking care of aging family. Some students do not have the luxury of full-time status, as other responsibilities take precedence. However, there are many ways for working students to make ends meet financially during school.
Students often rely on taking all allowed student loan money each semester, not considering the consequences. Remember, a loan requires pay-back. Let's face it; no one wants to pay for 20 years on a pair of jeans bought with student loan funds. The average student graduates with $23,000 in loan debt, which would be one expensive pair of jeans. It behooves students to only take what is needed to pay for school and school-related expenses.
One great way to benefit financially is to file taxes. Before cursing the IRS, there are several things to know about filing taxes in 2011. First step is simply to take the time to file. Since most college students are broke, averaging between $15,000 and $20,000 in annual income, taking advantage of tax season is an important step.
Students or those claiming students are only allowed to take one education credit on their tax return. Lifetime Learning Credit is a great credit and a personal favorite. This credit gives students up to $2,000 in an income tax return. As an added bonus, there is no limitation on the number of years students can claim this credit and it reduces the amount of income tax paid, causing the refund to be higher than expected.
According to the IRS, students can also qualify for the American Opportunity Credit.
Earned Income Credit, based on a sliding scale of income, is available to anyone who has made at least $1 in taxable income. For single students without children, the EIC return can total up to $457. For those claiming children (up to three) that check from the government has the possibility of an extra $5,666.
With the graduating population having trouble finding the dream job straight out of college, taking the help offered by Uncle Sam is more important than ever.
The bottom line is that students need to be more aware of funds they are spending and more frugal with loan money. Just because there are funds students are allowed to take, doesn't mean they should; and finding pennies or hundreds of dollars in the government's pocket will prove to be extremely beneficial when that post-grad dream job falls through.
-(Dena McDaniel is a processing manager of Jackson Hewitt Tax Service and a student at Oklahoma State University-Tulsa and Tulsa Community College.)
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