With 2014 behind us, it’s almost time for filing taxes. Making a point to understand how federal tax rules apply to your situation can help you file your taxes correctly and take advantage of any tax credits you may be able to claim. College students, and those who have dependent college students, should review rules and changes regarding education expenses and credits each year.
As a start, you may want to read IRS Publication 17, the annual tax guide for individuals. This guide covers the general rules for filing an income tax return and explains changes since the previous tax filing year.
Several notable changes may impact your 2014 taxes:
- Health care individual responsibility requirements apply.
- Several tax benefits have expired, including deductions for tuition and fees, educator expenses, state and local general sales taxes, and mortgage insurance premiums, among others.
- The personal exemption amount has increased for certain taxpayers.
- The number of tax refunds that can be directly deposited to a single account or prepaid debit card is now limited to three per year. Refunds beyond this limit will be sent via paper checks.
- Especially important for students, you may choose to include tax-free grants and scholarships as income, which may increase an education credit and lower your total tax or increase your refund. Certain requirements must be met; find complete details online at the IRS’s Tax Benefits for Education Information Center.
This is not a complete list of changes, and it is important to familiarize yourself with the specific requirements that apply to your situation. You may want to consult your tax preparer or get help from the IRS for your specific questions.
Penn State’s Financial Literacy Coordinator, Dr. Daad Rizk, can provide more information and resources about educational expenses, taxes, and other financial literacy topics impacting students. You contact Dr. Rizk at dar39@psu.edu.
