Time to pay Uncle Sam!
It’s tax season; what kind of red-blooded American would I be if I didn’t talk about taxes?
The U.S. federal government requires tax returns by April 15. That’s next week. By now, the only people left to file their tax returns are last minute types. If you’re anything like a typical college student, you’re one of them.
Tax returns are a messy process. Congress has enacted over 440,000 pages of tax code, offering an array of credits, deductions, income classes and more than most mortals ever need to know. That’s just federal taxes. There’s also a separate tax code for all 50 states and D.C., each with its own rates and rules.
Fortunately, the tax code holds opportunities for students and their parents. One new tax credit is the American Opportunity Credit, enacted last year. The credit provides up to $2,500 for the first four years of post-secondary education. Best, the credit is refundable up to 40 percent. This means the government can write you a check for $1,000, even if you owe no taxes at all. There are also other tax credit opportunities.
If you can’t file your return by April 15, that’s OK, too. The Internal Revenue Service allows you to file for a six-month extension, provided you meet certain conditions. Other rules qualify for those who live outside the U.S., so be sure to read the extension form carefully.
It’s never fun when someone takes money without your permission. But the U.S. tax code is not just about taking your money. It’s also enacting social policy. No matter what your feelings on taxes are, it’s ultimately your government. Call your congressman, and tell him or her what you think about the tax code. After all, Congress doesn’t know your views unless they hear them from you.
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