Tag Archives: taxes

It’s Not As Taxing As You Think

Just like that we’re in February.  Punxsutawney Phil did his thing.  The NFL did their thing.  And now it’s time for you to think about doing your IRS thing.

It always amazes me when I hear from students that they are “having their taxes done.”  It’s really not as intimidating as you might think to file on your own.   Here is what you need to know:

  • The Lifetime Learning Credit will allow you to reduce your tax liability if you had expenses for tuition and fees in 2019.  You will need to complete IRS form 8863 and Schedule 3 to claim this credit.
  • Student loan interest can 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 2019 is less than $69,000 you can e-file for free, with assistance from one of several well-respected tax software companies.
  • If you need to locate your 1098-T from Penn State, it is available on LionPath.  Click on the “my finances” button, select “manage my account/make a payment,” then scroll down to the bottom of the page.  You’ll find the link in the right column.
  • If you are living in Pennsylvania, you will likely also need to file state and local income taxes.

Filing your income tax may feel a little intimidating.  Throughout my career I have learned that nobody comes to law school because they love math.  But filing taxes is definitely something that a law student should be able to handle on their own, without having to pay a professional (or persuade a parent).  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!

There’s no need to fear.  Your “I Filed My Taxes” adulting badge is just around the corner!

Tax Refund?

I finally filed my taxes!  Ok…just the federal.  The state and local are on deck for tonight.  But the worst of it is done!  (Insert happy dance here.)

The first question that pops into people’s minds when you say you finished your taxes is, “How much are you getting back?”  My answer is that I’m not getting anything back.  I had to pay.  I had to pay exactly one dollar.  And you may think that I did something wrong that I’m not about to receive a sudden windfall.  But I think it’s just the opposite.  I did something almost exactly right.  I only missed by one dollar.  I didn’t let the US Treasury hold onto a lot of my money throughout the year.  And I didn’t have to write a giant check.  I had the withholding correct within one dollar.  And that’s about as right as you can be.

A big tax refund can feel great.  But what it really means is that you have been loaning your money to the government throughout the year.  And at tax time they pay it back to you.  Without interest.  Instead of being in someone else’s hands, my excess funds were in my hands.  Earning interest for me.  Paying bills.  Buying concert and music festival tickets.  If I had it to do over again, I wouldn’t change a thing.

Tax refunds are nice.  Not owing is nice.  Being right on track is even better.