Frequently Asked Questions
Taxes for College Students
If you earn income, you may need to file an income tax return, too. Not sure what to do? Read on.
Courtesy of Courtney Knoll, Ph.D., Clinical Professor of Accounting, Associate Dean of the Master of Accounting Program at UNC Kenan-Flagler Business School, and Executive Director of the UNC Tax Center. DISCLAIMER: THIS IS INTENDED TO BE INFORMATIONAL ONLY AND DOES NOT PROVIDE ANY TAX ADVICE. IF YOU HAVE ANY QUESTIONS ABOUT YOUR SPECIFIC SITUATION, PLEASE CONSULT A LICENSED TAX ADVISOR, (e.g., a Turbo Tax Expert).
Questions
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1. I am an international student. Does the information here apply to me?
Probably not! If you are an international student, your US tax situation is likely very different than it would be if you were a US citizen, and these differences vary depending on your home country. But don’t despair, here are two great resources for tax information and support, including tools to file:
2. Do I have to file a federal income tax return?
It depends on whether you received any income during the year, the type of income and the amount of income.
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Wage income: This is income from being an employee of someone where you get a regular paycheck. If this was your only income for the year AND it was more than the filing threshold, you would likely owe federal taxes and are therefore required to file a federal income tax return.
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Self-employment income: This is income from working for yourself (e.g., social media influencer, side gig, NIL, small business). If you make more than $400 this way, the IRS will consider you self-employed and you’d be required to file a federal income tax return. Though you’d only owe federal income taxes if you earned over the filing threshold this way, you’d still owe self-employment taxes on your net earnings regardless.
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Net earnings are equal to gross self-employment income less certain expenses related to such income. Expenses may include travel expenses (e.g., airfare, rental car, agent fees, attorney fees, etc. But be careful! You need to be well organized and keep track of the documents (e.g., receipts, invoices) that support the amount you are claiming as a deduction against your self-employment income. Although you don’t include this documentation when you file your return, you are required to have it and should save it for at least three years after you file your return.​​​
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Investment income: This is income from returns on your investments (e.g., stocks, savings account interest). If the only income you earned is investment income, you’d generally need to file a federal tax return if it was over the investment income filing threshold.
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If your total investment income was more than $2500 AND you have at least one living parent, you may be subject to the kiddie tax. This just means that you’d pay a higher tax rate on some of your investment income: for 2024, the first $1250 would be tax-free, the second $1250 would be taxed at your tax rate, and anything above $2500 would be taxed at your parent’s tax rate (usually higher than yours). If you think you might be subject to this tax, touch base with that parent to learn more about how to properly compute your taxes.
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If your income includes a combination of amounts from the three different types above, then things can get more complicated, but this should still give you a general idea of when you have a filing obligation. If you need more help, you can also use a guided interview provided on the IRS’s website.
3. Even if I don’t need to file a tax return…should I?
You may want to consider it, particularly if you worked as an employee. Why? Because your employer most likely withheld taxes on your behalf (i.e., your employer took a percentage out of what they pay you to send to the federal government as a prepayment of your current year’s taxes). If it turns out you actually didn’t owe any taxes, you’ll want to get that money back (a refund). The only way to do that is to file a federal income tax return to (1) tell the federal government that you don’t owe any taxes, and (2) request the refund of all those prepaid tax payments.
4. How do I know how much total income I received in the current year?
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When it comes time to file your return, you’ll need to collect all the information needed to summarize your total income. The starting point will be knowing how much income you received during the year. Whoever paid you may have to help you out by sending you a form showing you how much they paid you during the year, as well as how much in taxes they withheld and paid on your behalf. The type of form you receive depends on the type of income you received.
If you earned income working for an employer (e.g., a barista at a coffee shop), you should receive a Form W-2 from your employer stating the income you received from that job as well as how much taxes were withheld on your wages during the year. A Form W-2 acknowledges payments to individuals who are employees. This income must be reported as earned income on your tax return. If you do not receive a W-2 from someone for whom you worked, the income you received must still be included as income on your tax return.
If you received $600 or more in self-employment income (e.g., you made money delivering meals through a food deliver app, or a local bagel shop paid you to attend a special event), you will likely receive a Form 1099-NEC (“NEC” stands for “non-employee compensation”) from the entity that paid you. This form acknowledges payments to individuals who are not considered to be employees. This income must also be reported on your tax return. If you received less than $600 in self-employment income, you may not receive a 1099-NEC, but you must still report this income on your tax return.
If you received investment income (e.g., interest income) over a certain dollar amount, you may receive a Form 1099 with a “-“ and some letters next to it. The letters will indicate the type of investment income (e.g., “INT” for interest and “DIV” for dividends.) This income must also be reported on your tax return. If you had investment income, but do not receive a 1099, you must still report this income on your tax return.
5. How do I figure out how much tax I owe?
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To determine your current year total federal income tax, you first need to calculate your current year taxable income. Taxable income is calculated as your gross income less any available deductions. For most people, gross income includes all income received during the year. This includes all cash, the fair value of any non-cash (i.e., “in-kind”) items or services received, investment income, and any net earnings from self-employment (see above for more). “In-kind” income may include things you receive (other than money) in exchange for services, even if it is called a “gift.” This may include items such as clothing, food, cars, or other services.
Gross income is reduced by the greater of two amounts: (1) a set dollar amount (called the “standard deduction”) or “itemized deductions.” Generally, if your itemized deductions are greater than the standard deduction, you'll want to itemize. Consult with a tax expert to help you make the right decision (and discuss how to increase your itemized deductions for next year during your tax planning conversation).
6. Do I have to pay taxes if others can claim me as a dependent on their tax returns?
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Yes. All the answers in this FAQ are true even if someone else (e.g., your parent or guardian) claims you as a dependent on their tax return.
7. How do I know if I can be claimed as a dependent by someone else, and how does this affect my tax return?
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It is important to know whether you can be claimed as a “dependent” of someone else and correctly indicate your status when you file your return. It is important to get this right on your return for several reasons that can sound pretty complicated, but here are just two:
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It can affect how you and/or the person claiming you as a dependent (e.g., your parents) calculate certain things on your return (e.g., if you are someone else’s dependent then you can’t reduce the amount of tax you may owe by certain things.)
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If you do it wrong, it could create problems for your parents/guardians when they file their return.
If you are a full-time student in 2024, you will qualify as a dependent of your parents/guardians if:
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You were under age 24 on December 31, 2024,
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You lived at school or with your parents/guardians for more than half of the year, and
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You did not provide more than half of your own support for 2024.
You can usually ask your parents/guardians if they can claim you as a dependent. If they aren’t sure, they can use this IRS tool to figure it out: https://www.irs.gov/help/ita/whom-may-i-claim-as-a-dependent.
8. When do I file my tax return?
Federal tax returns are due mid-April following the end of the tax year, on or around April 15th (e.g., 2024 tax returns are due April 15, 2025). However, you may file for an automatic extension to file your tax return in October. The extension is ONLY for the tax return -- you'll still have to pay any additional taxes owed by the April deadline.
To get an extension of time to file your federal tax return, you need to complete a short and simple form (Form 4868). You can file this electronically using one of the free extension filing options listed on the IRS webpage (see https://www.irs.gov/filing/free-file-everyone-can-file-an-extension-for-free) or you can use snail mail to file a hard copy version of the form (see https://www.irs.gov/forms-pubs-search?search=4868).
9. When do I pay my federal income taxes?
During the year
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If it's self-employment income (remember, taxes were not taken out in advance), AND you expect to owe more than $1000 in federal taxes, you must pay an estimate of what you think you owe in taxes every quarter in mid-April, mid-June, mid-Sept, and mid-Jan of the following year . The actual dates vary slightly, so be sure to check the IRS website for that year's due dates. Make sure you set aside sufficient money to make these estimated tax payments and that you make them on time. Do not wait until your tax return is due to figure out how much taxes you owe. If you are required to make quarterly estimated tax payments but instead wait and pay all of your taxes when you file your tax return, the IRS will consider some of your payments late and you may owe interest and penalties in addition to the tax.
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If it's wage income, your employer will pay taxes on your behalf by withholding a portion of your pay every pay period.
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After the year ends
When you file your return you will calculate your total federal income tax for the year and compare this to all payments you have made through estimated tax payments and/or withholding. If you have paid in more than the total tax showing on your tax return, then you will request a refund of this amount. If you have paid in less than the total tax showing on your tax return, then you owe more tax. You will need to pay this additional tax when you file your tax return on or before the due date. You can do this electronically through the IRS’s webpage (same link as above).
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If you need some extra time filing your tax return, you can request an extension until mid-October, but you'll still need to have paid in all of the taxes you owe before the mid-April deadline. You can file this electronically using one of the free extension filing options listed on the IRS webpage.
10. Do I need to file and pay state and/or local taxes?
Everything mentioned so far relates to federal tax. However, forty-two states and even some municipalities, like New York City, have an income tax. So, depending on the type and amount of your income, you may also need to file and pay state income taxes in any state where you earned income as well as in your home state. That may sound like a lot of state taxes, but your home state may allow you to reduce your taxes (i.e., claim a credit) for any state taxes paid on the same income earned in another state.
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