It is Not Free Money!
Sometimes tax refund can feel like free money – manna from heaven! However, students should remember that it was their money paid to the IRS in the first place. For that reason, careful consideration should be given as to how you spend the refund.
If you are tempted to go on a spending frenzy, it may be pertinent to reconsider! Put your tax refund on the back burner while you figure out the best way to use the money that will be of benefit to your financial situation.
A tax refund should rather be seen as a bonus and not as free money to spend before it even gets on your bank statement.
Graduating from high school and attending college is a huge step to adulthood. With it comes the responsibilities of keeping up with studies and making yourself marketable for a job after graduation. You may also have to take control of your own finances, maybe stick to a budget, and if a nice slice of the tax refund pie comes along, manage that as well.
Before you can receive any tax refunds, you will need to begin filing taxes, but while you are still a college student, this can be a tricky process. You might get stressed at times, but taking advantage of the education tax credits you are eligible for and getting a refund will positively experience this.
Don’t rush through filing your taxes. Take your time and ensure that you claim all the deductions available to you.
Here are some points that you need to know about filing taxes as a college student.
It is often that the case that students doing part-time work end up with complicated tax affairs. Some students work in more than one job at a time, and sometimes they regularly chop and change jobs. This can lead to employers using the incorrect tax code on their payslips, and consequently, some students end up paying too much and will be eligible for a tax refund.
If you have taken on part-time work while studying, you may be unaware that you could be eligible for a refund. Keep track of all work you do, and keep all your payslips on file, as well as every receipt for expenses incurred relating to your education.
When you have everything handy, filing your tax return should be a relatively easy task. However, if accounting is not your strong point, find someone with the necessary expertise to help you so that you do not lose out on any refunds that may be due.
A survey conducted among students who are expecting tax refunds showed that 63% of those interviewed plan on putting as much cash as they can towards savings. Most were also of the opinion that money in the bank helps to resist the temptation to spend on unnecessary items.
Some students about to graduate believed that it would be useful to have some extra cash to rely on while job hunting. This will help relieve tension in what may be a very stressful time of CV”s and interviews.
If you are a student with multiple debts and are unsure how to allocate the funds, a smart move will be to focus on the debt with the higher fees or interest rates.
The bottom line is don’t procrastinate and hang indecisively onto your tax refund – use it to improve your financial situation. That is the smartest money move you can make!