College may be a time for students to become independent of their parents, but in the case of taxes, they may want to remain dependent, according to one tax specialist.
Tuesday at midnight was the deadline for U.S. citizens to file their tax forms on time. While some SIUC students said they file independently, others may save their parents more money than they would have received by filing individually. Gary Hoff, taxation specialist and senior editor at the Illinois Tax School at the University of Illinois, said this would benefit the families.
As long as students are enrolled full-time, under the age of 24 and supported by parents by at least 50 percent, parents can claim them, according to the Internal Revenue Service.
That way, Hoff said, parents will pay less in taxes and the student will get less money back.
Diane Frew, administrative aid in Career Services, is one parent who has claimed her child, a college student, on taxes in order to save. Although her daughter turned 25 this year and Frew was unable to claim her, she said she still filed her daughter’s taxes separately for her.
In the past, Frew said she decided to claim her daughter because she supported her largely through tuition and housing, but she said she would use part of the return to pay for something she needs such as auto insurance or a computer.
“It benefits her, totally,”
If parents claim a student as a dependent, then they’re going to get a tax deduction for the individual, Hoff said. If the student files alone, he or she may get a bigger refund for any taxes that were withheld in the previous year.
In order to decide whether to file separately or together, Hoff said parents can figure the student’s return and then figure the parents’ return claiming the student and see the difference.
Then, the student and parents can negotiate who gets the return amount, he said.
Hoff said a big problem that he sees is some students may file early without considering their parents, when they may have benefited from filing with them.
Many qualify for student-specific tax credits regardless of whether they file with parents, according to a recent report by USA Today College.
But not all students can file with their parents. Rosalind Mann, a senior from Marion studying English literature, is married and has a son, so she filed jointly with her husband this year. She said she used H&R Block online to help file, which she said is often free, but it cost the couple $25 because her husband is self-employed.
Hoff said citizens can file through the IRS Free File program, tax professional services or computer software. Some cost money, but all should have the same outcome.
The USA Today report showed more than 60 percent of students have their parents file their taxes for them, and close to 40 percent filed their own taxes or used a service such as H&R Block or TurboTax.
“As far as which one is the best, theoretically, all of them will come out with the same tax return,” he said.
Mann said she wasn’t sure whether H&R Block was worth the money, but she said the process was easy.
“I’m looking forward to getting a refund check; that’s for sure,” she said.
William Bruner, a senior from East Moline studying political science, said he has always filed his taxes independently since he has worked, and he does it through free software from the Illinois Department of Revenue online.
“I refuse to pay a tax person money,” he said.
Bruner said he finds the process simple and suggests students who are new to filing taxes to not use tax professionals but use free programs available to them.
For those who missed the deadline to file Tuesday, Hoff suggested they file as soon as possible, because it will cost them.
“If they’re reading this (today) and they haven’t filed, and they’re not on extension, they’re going to get penalties,” he said.