Filing tax return as an undergrad at MIT

Colleges & Universities Massachusetts Institute of Technology
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<p>I’m not sure whether this is the best place to ask this question but since everyone here is so helpful, I figured I can get some help here. =)</p>

<p>I am a prefrosh who is planning to find a campus job next year, but because I have lived aboard all my life overseas (even though I am an US citizen), I know next to nothing about the US tax filing system. I tried to do some googling but everything is so confusing! (There seems to be millions of forms) I mean, I don’t even know whether I am a “dependent” or an “independent” because my family circumstances are a little unusual. </p>

<p>Anyway, my question is: Will I be able to find an adviser/counselor to help me with my tax returns at MIT? Also, some side questions: What type of bank account should I create? Which bank is best for undergrads? </p>

<p>Thank you in advance!</p>

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<p>I would say most freshmen probably know very little about the US tax system – my dad filed my taxes for me until I was a senior, for example. :)</p>

<p>I honestly don’t know whether MIT makes anyone available to give tax advice to students. Most students have relatively uncomplicated situations: they’re dependent on their parents (their parents are paying for most of their expenses), they don’t own much property (if any at all), and they make relatively little money. So most students are able to file the 1040EZ form, which is one page long and is fairly easy to complete. </p>

<p>If your situation is more complicated, you can definitely ask around to see whether there are tax clinics for students – there very well may be, since graduate students are often filing taxes as non-dependents for the first time. Otherwise, you can file using a computer program (e.g. Turbotax) or using an accountant (e.g. H&R Block, which has an office in Central Square). </p>

<p>As far as bank accounts go, the most convenient bank for students is probably Bank of America, which has ATMs all over Boston (including several on campus) and a branch in the Student Center. The MIT Federal Credit Union is also a great option for students, and probably pays higher interest rates for savings accounts.</p>

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<p>I’m a parent of a current MIT student who just filed taxes for the first time. I found some online links for her. Since she had to file with both the IRS and the State of Massachusetts, I got this link from the Massachusetts Department of Revenue site:</p>

<p><a href=“http://www.taxhawk.com/[/url]”>http://www.taxhawk.com/&lt;/a&gt; </p>

<p>You can do your taxes for free online if you make less than a certain amount, which most students do. Chances are that you will be getting money back from both the IRS and the state.</p>

<p>Yes, taxes are complicated, but you have to start sometime.</p>

<p>(Also, the IRS had many links to free sites, but the Mass DoR only had a couple and the link above allows free filing for both the IRS and the State of Massachusetts)</p>

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<p>For $30 you can buy a program like TurboTax which walks you through everything step by step. You don’t have to know anything about taxes to use it.</p>

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<p>I swear by TurboTax personally</p>

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<p>TurboTax is really easy, there will also probably be upperclassmen who are willing to help you. I did my taxes in SIPB last year and got help from our alums, and this year I asked a billion tax questions online because I had to file in 3 states.</p>

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<p>Thank you for all the replies! I’ll definitely check out programs like TurboTax and I’ll probably try to get some assistance from mt student advisor during orientation. </p>

<p>Regarding state taxes though, do I still have to file them s if I’m not a resident of any states? Also, if I happen to make mistakes in the filing process because of a lack of knowledge (eg. declaring myself as a dependent when I’m meant to be an independent), can I get penalized? </p>

<p>The process seems much, much simpler in Australia… =(</p>

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<p>You generally have to file state taxes in the state where the income was earned, even if you’re not a resident. Massachusetts has a specific tax form for non-residents.</p>

<p>To be honest, you can be penalized for making mistakes – ignorance of the law isn’t really considered an excuse. But as a student, you will likely not be making enough money for it to really make a difference.</p>

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<p>Hey, </p>

<p>I’m coming out of hiding just to answer this post! (haha, actually, just kidding, I haven’t been on CC for ages).</p>

<p>So, OP, I’m a US citizen that grew up in Taiwan all my life, so I shared the same problem as you do. You can go seek tax help from other people when you get here, but I’ll share with you what has worked for me:</p>

<p>VERY BASIC TAX PRIMER -
In the US, if you work, you will receive a W-2 in the mail at the beginning of every calendar year. A W-2 is a summary of the wages that you earned from the last year, and one will be issued at every location that you were employed at. A W-2 shows how much money you earned, how much taxes is withheld (the US withholds tax from your pay usually as an incentive to get people to file taxes…there’s also withheld taxes for Social Security…etc.)…etc.</p>

<p>From the W-2s that you have, you proceed to fill out a 1040, or a 1040EZ. This is the most basic of all tax forms and you should remember what a 1040 stands for. This is simply “the tax return.” You need to fill this out using the information you have from your W-2s. At the end of the 1040, it will tell you whether you need to pay taxes (VERY rarely as a student) or how much tax refund you will get back (this is all the withheld taxes that you have from your W-2s).</p>

<p>If you do not have state residency prior to arriving in the States, you will be a resident of MA (like me). I believe you can continue to just not declare a state of residency but you will find out that it is much easier if you just declare MA (so you can vote, get a driver’s license…etc.). If you are a resident of MA, you are required to have health insurance (this comes with your MIT insurance plan, so don’t worry). For state taxes, this matters, so the insurance company will send you a letter too in the mail around the beginning of the year with the words “IMPORTANT TAX DOCUMENT” on it. Don’t throw that envelope away! You’ll need it for state taxes.</p>

<p>That’s all the forms you need to be aware of : )</p>

<p>FEDERAL TAXES -
Use the free edition of TurboTax online. Do not pay the money to upgrade to the full edition. You won’t need it as you will (~90% confident) not make enough money in a year to need to file using the upgraded edition. TurboTax is very clear, and will take you through the steps in an easy-to-follow manner. You will basically only need the information from your W-2s. A ton of the questions they ask you will be 0, as you don’t own property, investments…etc. The whole process should take you less than an hour.</p>

<p>By the end, when it asks you whether you want to file state taxes via TurboTax too (for an additional fee), DECLINE if you are a resident of MA and is a student. For people in this category, you can e-file online at the Mass Dept of Revenue website for free.</p>

<p>Regarding your dependent/independent question, you should file as an independent. There is an important distinction when you think about this in relation to Financial Aid. In relation to Financial Aid, you are still “dependent” on your parents, since they still provide for your livelihood and finaid officers use your parent’s income to determine your finaid package. However, regarding taxes, you should file as an independent because your parents (correct me if I’m wrong) do not pay taxes in the US. Thus, you are the only person in the US from your family, so by definition you are “independent” for the purposes of tax. By filing as an independent, you will avoid a lot of questions that can get quite confusing if your parents do not have tax records in the US, and it expedites the process significantly. I’ve done this for 4 years now and I’ve never had any problems with it.</p>

<p>STATE TAXES:
Similar to your federal tax withholdings, the state of MA will also withhold tax from you. Go to the Dept of Revenue website to file your state taxes there. The process should also take less than an hour. Have your W-2s ready, as well as the certification letter from your health insurer. As for TurboTax and state taxes, WRITE DOWN your ID and password from these two websites, as you will need them again next year to file your next year’s taxes.</p>

<p>BANK ACCOUNTS:
As an incoming college student and assuming that your parents do not have US-issued credit cards, it is important to start building your credit score from the first year of college (this matters because usually we cannot get joint credit cards from our parents unlike students with parents in the US…shared credit cards provide a form of backing to the bank (if you don’t have money, your parent will bail you out) which means it is usually what a lot of kids here get. you usually enjoy better rewards and a much higher credit limit). You generally should get at least two bank accounts, for flexibility. You should sign up with the MIT Federal Credit Union, which is like a “local” bank kinda on campus, which is pretty useful. They also have a higher savings interest rate than national banks. In addition, you should sign up with Bank of America, and get their student credit card. The student credit card should be fairly easy to obtain without a prior credit history, and the multitude of BoA locations in the US will make it very convenient for you to withdraw cash anywhere if you’re traveling in the US for the next 4+ years. BoA + MITFCU accounts plus a BoA credit card would be good starting points - you can also sign up for a Visa with a $1000 credit limit from MITFCU if you want. From there, you can graduate to more cards and accounts with Chase and Citibank (that offer potentially better and varying awards for spending) in the future, but that’s a good starting point as a college freshman.</p>

<p>Let me know if you have more questions! </p>

<p>ps. Filing taxes and getting refunds back is a great thing - especially with the Obama tax credit stimulus packages, I’ve gotten over $400 directly from Obama in cash just by filing taxes…in addition to my tax refunds! Also, filing taxes for free is always nice…I will venture to say actually that as a student who is not working 20+ hr weeks or have a lucrative (>$4000) summer job, you are doing something wrong if you’re paying to file any form of taxes : )</p>

<p>Also, don’t file taxes using paper forms. That is a nightmare.</p>

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<p>My son had to file income tax return with IRS and his state this year since he had some income from a summer job. We used Turbo Tax software. Because his income is very simple and low, filing a return with Turbo Tax is very straight forward. By filing, he is able to get the federal and state tax that was withdrawn from his pay check. </p>

<p>Good luck!</p>

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<p>@Oasis: Thank you for the lengthy response. I have some more questions that I want to ask but they are a little private for me to post them on the forum. I tried to send you a private message but it says you have “exceeded your limit”. Will you be able to clear your mailbox up a little so that I can send you a message? Thanks!</p>

<p>Thank you midwestdad2!</p>

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<p>^ Should be fine now, just PM me and I’ll get back to you. (you can also email me at my email address if you want a speedy response (might be more efficient) - you can find my email address on the MIT blogs…I’m the first student blogger that is listed if you go to the dropdown menu on the top :wink: just check my location and you’ll know who I am =p)</p>