Everyone seems to have income tax on the brain right now. The news is full of stories about people who are getting less of a refund this year than they did last year. Is the reason the changes to the tax code? Or did they just have less tax withheld from their paychecks? Or is it both? The world may never know.
I’m still working on my taxes right now, and things are definitely different from last year. But the basics of filing your federal income tax as a law student are actually pretty much the same. Here is what you need to know:
- The Lifetime Learning Credit still exists, allowing you to reduce your tax liability if you had expenses for tuition and fees in 2018. You will need to complete IRS form 8863 and Schedule 3 to claim this credit.
- Student loan interest can still be claimed as an adjustment to income, reducing your tax liability. You will need to complete Schedule 1 to claim this credit.
- Student loan disbursements that you received DO NOT count as income.
- Scholarships that do not exceed tuition and fees DO NOT count as taxable income.
- If your income for 2018 is less than $66,000 you can e-file for free.
- The 1040 form looks a lot different (shorter) than it did in the past. And the 1040 A and 1040 EZ no longer exist. But how you attack the process of filing really hasn’t changed much.
Filing your income tax can be intimidating. But it’s definitely something that a law student should be able to handle on their own, without having to pay a professional. The online/software programs available to help make it really easy. And if you are getting a refund—that makes it all worthwhile. And if you are NOT getting a refund, all the better. That means that you have not been giving the federal government free use of your money all year!