Although tax time is here it's still a good idea to gather all relevant documents before contacting a tax preparer. For years families with students in college forfeited a total of 726 million dollars in unclaimed benefits. Under the new tax provisions just passed by the current federal administration families that set up college funding will save and benefit the most when time for their children to attend college.
Review the basics.
A lot can happen in a year. You may enter or leave a marriage or begin caring for someone who qualifies as a dependent, and major transitions like this could impact your tax filing status and change the amount of income you'll ultimately pay taxes on.This is also true with the FAFSA (FREE MONEY)
Capture every deduction.
Think about whether you want to itemize or take the standard deduction. If you're doing your own taxes, taking the standard might be worth it to you for the no-fuss process alone. There may be a chance your itemized deductions exceed your standard amount, however, so review allowable itemized deductions -- especially if you're a business owner, property owner or self-employed.
Know what and how to file.
Not all income is created equal. Understanding this fact is one reason the rich gets richer and the poor gets poorer. Most wage earners are probably familiar with W-2 forms, and if you're an independent contractor you're aware of 1099 forms, but many other income types have their very own kind of 1099 form. If you're not sure where to start, make a list of all your income sources and move forward from there.
Do you know:
... why it may not be in the best interest of a college student to choose work study?
...how to accumulate tax free money for college?
....when to best deal with the fact that you did not have health insurance and you are about to be penalized by hundreds of dollars?