College tuition credit?

ryanbis
Fri, 07 Jul 2006 01:24:28 +0000

“…it’s just that it’s just that in the past i’ve heard that u dont want the govt withholding too much from u but u also dont wanna keep too much cuz then when u gotta fill out the tax forms the next yr u mite end up owing too much or if the govt took out too many taxes it would mean they borrowed money from you throughout the year you could have used on other stuff…”

Well, that’s true, but you don’t have to worry about the amount of your withholding if you’re not subject to it. At least tells us that first. Are you from New York? If not, do you expect your New York income to be high enough to have to pay New York taxes? If your only source of income from New York is your work-study job, then the answer is most likely no, in which case you should just fill out the Exemption form.

“so i don’t get this idea behind withholding taxes.”

Federal and (in this case) State governments don’t want to wait for their money and require (except under specific circumstances) money to be withheld from your paychecks in order to cover your expected income tax for the year. They do allow you some control over the amount that is withheld, hence the form IT-2104, which adjusts your withholding for the amount of taxes you expect to pay. That’s why they ask you so many questions on that form (such as whether or not you’ll be taking an educational credit)–to estimate what your tax liability will be and adjust your withholding accordingly. Your goal is to reduce your withholding as much as you can without incurring a penalty at the end of the year (which is usually assessed if you owe more than $1,000 in taxes at the end of the year).

Nevertheless, you shouldn’t worry too much about any of this right now. The time value of your work-study money is immaterial. Worry about it when you’re working full time.