In a Thursday afternoon lecture, Valerie Johnson focused primarily on teaching students the important basics of taxes and tax returns.
Valerie Johnson, the office manager of the H&R Block and an MBA graduate at the University of Phoenix, started the lecture explaining the basics. Johnson first talked about important things for students to avoid, such as filing with a significant to other to claim tax benefits.
“According to Colorado law, if you file jointly you are common law married…H&R Block has married a lot of people,” Johnson said with a laugh.
Tim Cutter, a 23-year-old junior geography major, said he attended the meeting because he wanted to have a better understanding of the tax system.
“I haven’t done taxes before, I know nothing about it,” Cutter said. “I think I can gain a better understanding from something like this.”
The event covered all the basics, catering to students like Cutter, who may feel intimidated by the complexities of taxes.
Rutvij Clerk, a 23-year-old telecommunications graduate student, attended the meeting but said he did not feel overwhelmed by taxes.
“I’m doing taxes for the first time, but I’m not too worried,” Clerk said. “I’m an on-campus employee so it’s nothing too complex.”
Johnson also explained the differences between various tax forms, and when they need to be filed.
“A W-4 is what you give your employer to tell them how much to withhold from your paychecks,” Johnson said. “A W-2 shows how much you made annually, and shows how much is withheld over the year.”
Johnson said that by law employers must send out W-2 by Jan. 31, but students who have not received a W-2 by now should contact their employer. Students should also make sure that their name and social security number on the W-2 are correct.
“You want to make sure that your social security is reflecting your wages, not anybody else’s,” Johnson said.
Students also need to know if they will be filed as a dependent on their parents’ tax forms. Johnson said that parents can claim a child as dependent until age 24, if the child is a student, or until age 19, if the child is not. Dependents need to file taxes when they have an unearned income of $950 or earned income of $5,700.
“Dependents must provide less than half of their total support, which includes housing and insurance,” Johnson said.
Johnson said that according to the IRS, all income must be reported in a tax form. However, student loans do not need to be reported as income because the student is responsible for paying the loans back.
After explaining the basics, Johnson talked about ways students can avoid having to pay taxes after filing, and can instead receive tax refunds.
“H&R Block suggests you withhold 10 percent of your paychecks, that way you break even at the end of the year,” Johnson said.
Students can also receive money in a tax return by getting tax credit. Tax credits reduce the amount of income tax paid. This is different from a deduction, which reduces the amount of income subject to tax.
The Hope credit allows students who are not claimed as dependents to receive up to $1,800 in credit for the first two years of higher education.
For the tax years 2009 and 2010, the American Opportunity credit is an extension of the Hope credit. This allows students to receive credit of up to $2,500 for qualified education expenses during the first four years of higher education.
Johnson said that many students would benefit by becoming aware of these credits.
“A lot of college students don’t even know this stuff exists,” Johnson said.
Contact CU Independent Staff Writer Lindsay Mullineaux at Lindsay.mullineaux@colorado.edu.
