What kind of breaks can I catch if I file taxes as a student?

FIRSTLY

Do you even have to file taxes when you’re still a student? Being a student doesn’t control whether you file taxes. Whether you have INCOME does. You have to file if you made at least $12,000 in a year (that’s the threshold as of 2018). Even if you made less than $12,000 (a part time job maybe?), you might WANT to file anyway, if something called “federal income taxes” were withheld from your pay, because you could get a refund. You can check this on your paystub.

SECONDLY

There are definitely breaks you catch as a college student. If you have student loans, you can deduct the interest you paid on those loans. As in, you use that interest payment to lower your total income that gets taxed. Result = the lower your income the less tax you pay.  

How does a deduction specifically work? Think about it this way (super easy math):

If you have $20,000 in income + your tax rate of 20% (meaning 20% of your income goes to taxes) = Your tax bill is $4,000

If you could DEDUCT $2,500 of interest you paid on your student loan (the maximum deduction allowed is $2,500 a year, by the way), our example would look like this:

• Your income $20,000 - $2,500 = only $17,500 in income

• Tax rate of 20%

• = tax bill of $3,500

Your $20,000 in income - your $2,500 deduction = only $17,500 income. With your tax rate of 20% = a tax bill of only $3,500.

👯‍♀️You saved $500, by taking that deduction against your taxes. Do the same deduction if you received scholarships too, that also can lower your total income if you had any.