Budgeting
- Follow the 50/30/20 rule (or something similar)
- Track and review your expenses weekly
- Have life goals and plan for them
- Don't stretch yourself financially and end up with unaffordable payments
Saving/Investing
- Build up an emergency fund
- Understand that saving is NOT investing
- Invest young; look into Roth IRAs
- Always have a diversified portfolio
- Don't pass up employer matches in retirement accounts
Credit
- Develop and maintain a high credit score
- Do not overborrow and keep balances low (no keeping up with the Joneses)
- Practice good spending habits with a debit card before getting a credit card
Loan & Debt Management
- Start by estimating your future salary to make sure you can repay debts regularly
- Understand loan terminologies like deferment, forbearance, default, and loan servicer
- Make prepayments if possible to avoid interest accumulation
- Learn about all repayment options before choosing one
Top 10 College Student Tax Questions
Do I need to file a federal tax return?
What sites can I use to file my federal tax return?
- Free on the IRS site or you can print it and mail it.
- Sites like TurboTax and H&R BLOCK are also commonly used by college students
How much does it cost to file a federal tax return?
- If filing yourself on something like this IRS website, it could be free.
- If filing with a service like H&R Block it could cost about $30-$80 for computer software to do it, but there is also a free version where you are guided to file it yourself.
- Hiring a tax preparer if you have a complex tax return could cost between $200-$1,000, but most college students do not have complex tax returns.
What information do I need to file my federal tax return?
What are some basic tax terms I should know?
What are the different types of taxes that I might pay?
- Federal Individual Income Taxes and possibly a state income tax
- Property taxes when you own a home.
- Sales taxes on everything.
What is the deadline for filing federal taxes?
- Typically, it is April 15th, but don’t wait until the last minute.
- If applicable, filing earlier could help you get your refund quicker.
- You can start filing as soon as January 1st.
How do my parents claiming me on their taxes affect my need to, or ability to, file a tax return?
- This does not stop you from filing your own return or being required to (if applicable).
- Typically parents benefit from claiming you as a dependent because parents may receive child tax credits, earned income credits, and additional tax benefits like education credits from your 1098t form
How safe is filing federal taxes online?
- More secure than mailing tax returns
- File directly through the IRS or through or other reputable websites used by students, like TurboTax or H&R BLOCK
How do I avoid tax filing fraud, which is a version of identity theft where someone files your tax return and gets your refund?
- Don’t leave important documents, like your Social Security Card around.
- File taxes early, on reputable websites and avoid phishing scams.
- Shred tax documents when done using them, keep them in a locked and/or password protected location.
- Visit this IRS site for more details on how to determine if you are a victim already, additional preventive activities and how to recover from this if you are a victim.
