Tag Archives: taxes

#FearlessFebruary: Filing Fears

29 Feb

This month, I did something just about every adult in North America does this time of year: taxes. While this might seem to be a mundane task, it was quite frightening for me, as it is for many first time filers. Now that I have filed though, I see that it was not as bad as I thought it was going to be and I started wondering where the stigmas and fears come from.

Part of the fear stems from the fact that this is something “adults” do. While I am over the age of 18, it has not seemed to hit me yet that I am considered an adult. I am still in school and doing many of the same things I was doing when I was underage; as a result, I have not yet fully transitioned into “adult mode”.

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Another part of the fear comes from the stigma that filing taxes is hard and takes a long time. Growing up, at least for me, February-April was a time of stress and anxiety. My parents would pour over every receipt looking for ways to get more money back, and as a result they noticed all the frivolous money they had spent over the year and the tension in the house was high. Luckily for me, I keep a pretty good track of what I spend, and the actual filing was fairly easy because I used an online program. I filed mine within two hours, which considering I had no clue what I was doing, it went pretty fast.

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The final fear people have when filing their taxes is that they will mess up and they will owe money or be accused of fraud (or at least this was my fear). In the end though as I said before, filing was fairly simple and while you may end up owing some money, every case is different, at least you’ll know that you passed this large milestone.

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-Chrissy Ellis

How You Can Get $2500 From the IRS This Year Just for Being You

16 Feb

No, my fellow broke college students, this is not a scam. It sounds almost too good to be true, but honestly, I wouldn’t be here telling you about the American Opportunity Act unless I had personally benefitted from it in a 100% entirely legal way.

Remember a couple of years ago when the economy was in complete ruins and Congress enacted The Recovery Act a.k.a. the Stimulus? Well, the estimated price tag on that economic stimulus package was a whopping 700-some billion dollars. The funds were appropriated as relief in the form of unemployment benefits, new infrastructure projects, federal tax incentives, and enhanced benefits to help out students paying for higher education. THAT’S US!

Now for some quick facts:

  • The American Opportunity Credit is an expanded tax credit that temporarily replaces the Hope Credit but is only available for the 2009 and 2010 tax years.
  • The income limit for this tax credit ($80,000 or less for individuals; $160,000 or less for married couples filing a joint return) is higher than that of the Hope Credit. Also, low-income families that do not owe any taxes can still claim the American Opportunity Credit. All around, it means that more people will qualify for the tax credit now.
  • The Hope Credit only applied to students in their first two years of higher education. The American Opportunity Credit applies to any student still in their first four years of higher education.
  • The claim amount is up to $2,500 per student (only $1,000 for families that do not owe taxes). To get the full amount, you must have spent $4,000 on qualifying college expenses (for example, the cost of tuition or required textbooks) in the past tax year.
  • Any scholarships or grants that you have received will deduct from the amount of qualifying expenses. However, even if you did not spend a full $4,000 you still get part of the $2,500.

I know that this is all a lot of jargon, but when you or your parents are filing your tax return this year, make sure to ask whoever does your taxes to take a look at your 1098-T Form, which is your Tuition Statement. At the bottom of that form is some information about how to claim your share of the American Opportunity Credit. It’s written in super miniscule 8-point font, but whatever, US Government, I won’t judge. If I had to give out that much money to that many college students, I wouldn’t want to blatantly advertise it either.