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When Does a College Student Need to File a Tax Return?

Got a college student? Your life can be complex. Add to that the confusion over whether your student needs to file a tax return and you might need help. Today my guest blogger is a CPA, Carol Topp of TeensAndTaxes.com.

When does a college student need to file a tax return? Here are some typical situations of when a student should file a tax return and may owe taxes:

  • Your student received a W-2 and federal income tax was withheld. Look at the W-2 Box 2 Federal income tax withheld. He or she may be due a refund of that money.
  • Your child received several W-2s, but did not have federal income tax withheld on all the W-2s (look at Box 2). They may not have had enough tax withheld and may owe income tax.
  • Your student received a form 1099MISC and Box 7 Nonemployee compensation has an amount in it. Your son or daughter has been classified as an independent contractor and needs to file a tax return to pay self-employment tax and may owe income tax as well.
  • Your son or daughter received investment income from interest and dividends. A child’s investment income may be taxed at the parent’s tax rate if the investment income is more than $1,900 and the child was a full-time student, under age 24 at the end of the tax year.
  • Your student started a business and made a profit. He or she may need to pay income tax and self-employment tax. Visit MicroBusinessForTeens.com if your child has questions about starting or running a business.
  • Your student started a business and lost money on it. He or she may wish to file a tax return to reduce their taxes in this year or future years.
  • Your college student received a form 1099B from a broker, bank or mutual fund company because he or she sold stock or a mutual fund and had a gain on the sale. Your child should file a tax return and include the stock sale on Schedule D.
  • Your student sold stock or a mutual fund and had a loss on the sale. He or she may wish to file a tax return to reduce their taxes in this year or future years. Capital losses are limited to $3,000 a year and can be carried forward.
  • Your son or daughter had earned income from a job or a business and wishes to open a Roth IRA. File a tax return to establish that your child had earned income even if tax is not owed.
  • Your student received a scholarship that included room and board. This portion may be taxable. See the IRS website http://www.irs.gov/individuals/students/ for details and examples of taxable scholarships:

If any of these situations happen to you, read more about taxes for your college student at TeensAndTaxes.com. Then consult a local CPA to help your son or daughter file a tax return.

Carol’s site, TeensAndTaxes.com has some helpful articles. She also offers an ebook and an audio to help clear the confusion about taxes for teenagers and college students.

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One Response to “When Does a College Student Need to File a Tax Return?”

  1. ask says:

    This web site definitely has all of the info I needed about this
    subject and didn’t know who to ask.

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