Tax tips for college students
MSU Denver’s Volunteer Income Tax Assistance class has assisted low-income Coloradans for over three decades. Here are four tips to keep your finances in order.
Accountant Robert Persichitte worked at H&R Block preparing tax returns during his college years. He still vividly remembers assisting single mothers with incomes under $25,000 who would end up paying $600 to $700 to H&R Block for his services.
“I was the most expensive thing they were going to do all year, and I was a college student without a ton of real-world experience,” said Persichitte, an affiliate faculty member in Metropolitan State University of Denver’s Accounting Department.
The experience helped Persichitte understand that low-income families raising kids need every penny, he said. Today, the Certified Public Accountant strives to ensure that tax preparation doesn’t cost a cent for low-income families and individuals as coordinator for MSU Denver’s Volunteer Income Tax Assistance class.
The University has supported the Internal Revenue Service-sponsored VITA program for more than three decades, helping Denver-area lower-income individuals and families with their tax returns. MSU Denver’s VITA class is affiliated with the Piton Foundation, a group of community-based nonprofit, government and private organizations.
This year, nearly 30 students participated in the program, helping more than 150 households that earned less than $56,000, Persichitte said. Unfortunately, because of COVID-19 concerns, the program was forced to shutter its in-person consultations after its March 12 session.
Some Denver residents such as John Batt have been receiving tax-preparation help from MSU Denver students for years. He has worked with VITA to prepare his taxes since 2017 and said the program was a great service to the community.
“(The students) are smart, they’re quick, and I’ve never had a problem with the work they do,” he said.
MSU Denver student David Campos (pictured above in the lead image) worked behind the scenes to prep Persichitte’s students for the program. He graduated from MSU Denver last May with an accounting degree and is pursuing a master’s degree in accounting.
Campos helped the students learn the IRS TaxSlayer software used to file VITA clients’ returns electronically. The students who participate in the VITA program earn a certification as volunteer tax preparers.
“I’m not that far ahead from where (the VITA students) are. Some of them are seniors graduating in May and have questions about how to get into the master’s program,” said Campos. “Their questions aren’t just class-specific, but they ask how to get where I am at, and I put them with the right sources so they can reach out to them.”
Concerned about your taxes this year? Here are Persichitte’s basics for getting your taxes in order.
Keep all your documents and bring them to your tax preparer
It’s wise to bring documents such as last year’s tax return, mortgage-insurance taxes and more when receiving tax-preparation services, Persichitte said. Don’t worry if the person assisting you doesn’t use 90% of the documents you bring – it’s better to be prepared.
Pay close attention to tax credits
If you are a student, it is important to pay attention to tax credits, Persichitte said. He pointed to the American Opportunity Tax Credit as an example of a credit to look into. The credit is for qualified education expenses paid for an eligible student for the first four years of higher education.
According to the IRS website, you can get a maximum credit of $2,500 per year if you are an eligible student. To be eligible, students must be pursuing a degree, not have finished the first four years of higher education, not have a felony drug conviction at the end of the tax year, be enrolled at least half time for at least one academic period and other provisions. More information can be found at the IRS website.
“It is really important to get that one right and make sure you’re getting all of the qualified expenses,” said Persichitte.
You have until April 15 to make contributions to an Individual Retirement Account. Here is why that is important
Persichitte said that in many instances, taxpayers can save into retirement accounts all the way until they file their tax return. He said to think of that as a way to lower your tax bill even after the year is over.
Stay up to date with IRS deadlines amid the COVID-19 crisis
As part of the federal government’s coronavirus response, taxpayers will get 90 extra days to pay the income taxes they owe for 2019, Treasury Secretary Steven Mnuchin said Tuesday at a news conference in Washington, D.C. Instead of being due April 15, they will now be due July 15 (April 15 remains the deadline for filing a return).
Persichitte recommends that residents continue to check the IRS website for updates.